News

The National Association of Estate Agents (NAEA) has called upon the Chancellor, Alistair Darling, to aid further the housing market recovery and avoid sending Britain into a ‘W’ shaped recession.

In a submission delivered to Downing Street, the NAEA calls on Mr Darling to:

- Immediately extend the current stamp duty holiday
- Conduct a longer term review into the function of Stamp Duty
- Intervene in the mortgage markets to encourage banks to lend again
- Improve access to finance for first time buyers
- Suspend Home Information Packs

Extending the Stamp Duty holiday
Peter Bolton King, Chief Executive of the National Association of Estate Agents, said: “The current Stamp Duty holiday, for properties up to £175,000, is due to cease at the end of this year. This, coupled with the reversion of VAT to its original rate of 17.5% - and possibly beyond in the future - threatens to cause damage to the fragile recovery we have so far seen in housing sales, just at the time when further stimulus is drastically needed."

Conduct a longer-term review into the function of Stamp Duty
Peter Bolton King said: “It is clear that Stamp Duty is an outdated and unpopular tax which is out of date and out of place in today’s world. The NAEA calls on the Government to commit to examining the future of the tax to see how it can be amended to produce less regional inequality and to stop it acting as a barrier to entry to the housing market. We would welcome the chance to be part of this review.”

Intervene in the mortgage markets to encourage banks to lend again
Peter Bolton King commented: “The lack of available mortgage finance is significantly hampering the supply of, and access to, mortgages. Despite considerable public pressure, banks continue to restrict access to mortgage finance and charge rates far higher than the current level of interest rates. A more interventionist solution is now required to force banks to lend again.

"Moreover, there are still significant consumer concerns about lending and the level of approvals. NAEA July research conducted among 1,860 respondents showed that nearly one quarter felt that the lack of available mortgages was preventing them from purchasing property at the moment, and a majority (57.6%) felt that if the banks were to start lending again it would make a “big difference” to the property market.”

Improve access to finance for first-time buyers
Peter Bolton King said: “First-time buyers are central to a properly functioning housing market but the lack of mortgage finance is particularly impacting on this group. High loan-to-value mortgages are being withdrawn and the consequent rise in the amount being demanded in deposit means it is becoming increasingly difficult to gain a foothold on the housing ladder.

“The NAEA calls on the Government actively to encourage lenders to provide high loan-to-value mortgages to enable first-time buyers to enter the market. We recognise that high loan-to-value mortgages carry additional risk for the lender, so we are calling on the Government to actively promote the use by lenders of Mortgage Indemnity Guarantees (MIGs) or Mortgage Insurance on properties with a high loan-to-value ratio. We also call on the Government to examine the viability of running a state-backed MIG scheme for lenders."

Suspend Home Information Packs
Peter Bolton King commented: “The NAEA calls on the Government, once again, to suspend Home Information Packs. The cost of the packs punishes sellers, while more than three quarters of buyers – 77% - do not consider them before they decide whether to buy a property. During a recession this is an unacceptable situation. The NAEA calls on the Government to i suspend mmediately HIPs while the UK economy is in recession, and to commit to re-examining their viability once the economy is out of recession.”