Rics calling for action to kick-start housing market

Permalink: Rics calling for action to kick-start housing market
by Kay Murchie

The Royal Institution of Chartered Surveyors (Rics) is calling on the Government to take the necessary steps to kick-start the housing market.

The plea comes as the organisation revealed today that housing sales have slowed to their worst level for 30 years.

Furthermore, today the Bank of England has revealed that the number of mortgage approvals for homebuyers has fallen to 33,000 in July, down by 71% compared with the same period last year.

And, just last week, the Nationwide revealed that the average house price has fallen by 10.5% over the last year – this represents the fastest fall since 1990.

Howard Archer of Global Insight believes the weak mortgage data demonstrates that activity in the housing market is depressed and point towards further falls in house prices over the next few months.

As a result, Rics is asking the Government to increase the number of available mortgages. Recent figures from Moneyfacts show that there are now 3,748 mortgage deals available compared with 13,027 mortgage products last August.

Rics is recommending that the government allow the Bank of England to guarantee the issue of new mortgage-backed securities - home loans which are parcelled up and sold on to other investors.

According to Rics, this move would increase the number of new mortgage offers available.

In addition, Rics is suggesting a tax-free saving scheme which will enable first-time buyers to more easily save for a deposit.

Rics also wants to stamp duty suspended for a short period of time followed by a new lower rate.

Last month, the Government announced it was considering a possible suspension of stamp duty on house purchases. However, since this announcement, it appears that the housing market has entered an even more severe downturn as prospective buyers wait to find out the outcome.

No-one from the Department of Communities and Local Government was immediately available to comment on the recommendations from Rics.