Government action to limit the impact of energy price hikes has helped pull the housing market back off the cliff, a leading real estate association has said City AM this morning. However, the National Association of Property Buyers (NAPB) emphasizes that further steps are urgently needed to ensure we do not see an emergency Fall in real estate prices in the new year.
“The government’s swift action to limit the impact of energy price hikes has avoided the cliff the property market was heading for, at least for now,” spokesman Jonathan Rolande said this morning.
“There are still many problems with our economy and housing supply, not to mention the huge inequalities faced by those who neither own a property nor have financial support from anyone who does.”
With a rapid fall in prices appearing unlikely for now, now is the time for the government to keep the market stable and take action to restore the market to what it was before the recent boom.”
Rolande outlined the measures the NAPB would like to see implemented, adding: “We need to start reforming the stamp duty.”
He explained that “a positive move would be to see zero rates for retirees moving down the number of bedrooms, reduced rates for those involved in purchasing transactions, and zero rates for first-time buyers in less affluent areas.”
“We should also try to sell unused common land for housing, on condition that it is built within a year. Where land is not being purchased by developers, municipalities should be encouraged to organize building and rental programs
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“Finally, I would like to see ministers offer tax breaks to landlords who commit to long-term letting with sensible, fixed rent increases. Longer-term rental is a bigger risk for the owner, so reward them for providing more security for renters,” he said.
Rolande’s comments after pundits reported that the housing market could collapse as interest rates rise and the economy slides into recession may prove overstated.
House prices have skyrocketed due to near-zero interest rates and many assumed they would fall back to earth when mortgage costs finally started to rise.
Property is now less affordable than ever, with an average UK property costing 9.1 times the average salary, up from just 3.55 times 25 years ago in 1997.
The Bank of England has repeatedly raised interest rates to curb inflation and this is ddrive up mortgage costs.
That average two-year fixed rate has almost doubled to 4.24 percent from 2.24 percent two years ago, the latest figures from Moneyfacts show.
But Prime Minister Liz Truss’ energy price freeze last week could bring inflation down as much as 4 or 5 percent.
That would ease the pressure on the BoE, although it is still set to hike rates at its next meeting on September 22nd.
Wages are rising faster than expected while unemployment has fallen to its lowest level since 1974.
It is now down to just 3.6 percent in July, figures released yesterday showed.
This reduces the number of forced real estate sales due to unemployment, while Halifax figures show prices rose a further 0.4 percent in August and 11.5 percent for the year.
North London estate agent Jeremy Leaf said the shortage of stock was also supporting prices. “We do not expect a significant correction yet, although the market is more price-sensitive.”
By CityAM
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