Govt reveals plans to revive housing market
- Published: 02 September 2008 08:27
- Author: Nick Edwards
- More by this Author
- Last Updated: 09 September 2008 09:40
The Government has attempted to revive the ailing housing market today with a package of initiatives, including extending funding grants for social and affordable housing to councils and registered social landlords.
Housing minister Caroline Flint also announced a shared equity scheme aimed at first time buyers and measures to reduce the risk of repossessions.
First time buyers whose household income is under £60,000 will be offered an equity loan of up to 30 per cent of the value of a new-build property.
In a statement the Department for Coummities and Local Government said: "The Government 'will bring forward funding for social housing from existing budgets, delivering more social homes sooner. For the first time, local authorities who continue to directly manage their stock will be able to apply for this grant to build social housing, alongside registered social landlords.
"As well as delivering the social housing needed, this will also help to maintain capacity within the housebuilding industry, and help prepare the ground for the recovery in the market."
Earlier this week the Royal Institution of Chartered Surveyors called on the Government 'to act swiftly and decisively' to revive the housing market by cutting VAT on refurbishment and maintence on empty properties and reforming stamp duty.
RICS cites tackling mortgage liquidity as the crucial first step towards rescuing the situation and calls on the Government to incentivise the issuance of new mortgage backed securities and covered bonds to give investors the confidence to return to the market.
Such a move, which RICS says should include a proportion of funds dedicated to first time buyers, has been called for by mortgage lenders and would be specifically aimed at improving the flow of funding for new mortgage lending.
To support this injection of lending funds, RICS is also asking the Government to establish a tax free savings account supported by Government contributions to help first time buyers save for a deposit.
RICS then sets out a wide-ranging package of fiscal, regulatory and consumer-focused measures. These include fundamental reform of stamp duty, a complete overhaul of housing models, bringing clarity and accessibility to shared ownership and rent-to-buy housing schemes, and a fresh approach to consumer protection and information in property.
The package also covers mortgage rescue schemes, designed to enable people to stay in their homes with housing association assistance.
However, it is essential that the Government implement a long-term sustainable plan. It is necessary that empty homes are brought back into use as quickly as possible to boost housing supply in areas where demand is high and to boost regeneration in low demand areas.
RICS proposes reducing the cost of bringing property back into use by cutting VAT on repair and maintenance and giving local authorities real flexible power to use empty dwelling management orders in ways that reflect the dynamics of the property market.
RICS director of external affairs Gillian Charlesworth said: "The market needs decisive Government action on a range of fronts if it is to pull itself out of the doldrums and we call on Government to listen to the market's solutions to a whole set of problems. We know there is no silver bullet that will slay this monster but we need a joined-up, comprehensive approach to bring back confidence and to give the public clarity about what is available.
"While we wait for the Government to act on all the necessary fronts, many home owners are trapped in a market offering little or no mobility without any prospect of good cheer in the Autumn."
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