Mixed reactions on housing proposals from government
October 19, 2008
The government in the UK has made a number of new proposals recently to try and kick start the slow housing market, and amongst the actions taken by the government are a suspension in stamp duty for properties up to £175,000, and also the provision of loans for first time buyers looking to purchase new build properties. Industry groups and officials have offered mixed reactions to these moves, some of which can be seen below.
Officials from the Council of Mortgage Lenders said: “Essentially this package is directed at the blockages in the housing market for some vulnerable consumers. This is welcome, but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets. But we welcome the announcement of reforms to Income Support for Mortgage Interest next spring, where the waiting time for new claims is being cut from 39 weeks to 13 weeks, and the upper ceiling for the size of mortgage that will be met is being raised to £175,000.”
The CML added: “The mortgage rescue proposals for some borrowers who would otherwise become homeless, while also welcome, will help only perhaps 6,000 households over two years. The new shared equity product to help first-time buyers will be useful for a particular tranche of would-be home-owners who genuinely wish to enter the market now. The proof of the pudding will be in its uptake. The stamp duty concession for properties under £175,000 is something of a curate’s egg - good in parts.”
There was also a response from the Royal Institute of Chartered Surveyors, which said: “The government has failed to listen to the property industry and respond to market pressures and their proposed measures will have little impact on those suffering as a result of the current crisis. Action to increase lending by improving liquidity in the mortgage market is essential as part of a coherent package of measures alongside help for first-time buyers and protection against repossession.”
It went on to state: “Without making it easier to get a mortgage, the government is doing no more than tinkering around the edges of the housing market downturn.”
Officials from the housing charity Shelter have said: “The package of measures shows the government is listening and trying, and taking all the steps that it could. However, what has been announced will still be dwarfed by the massive scale of the housing crisis, and will be very limited in helping enough homeowners to turn the market around. The package will only really help about 15,000 people in total, but with 45,000 set to be repossessed this year, hundreds of thousands priced out of the market and millions stuck on the council house waiting list, the help the government is offering doesn’t go far enough.”
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