Page last updated at 08:23 GMT, Monday, 1 September 2008 09:23 UK

Housing market 'needs more help'

For sale signs in London
RICS says housing sales are now at a 30-year low

The government needs to take "significant and decisive action" to help kick start the housing market, the main surveyors' organisation has said.

The call from the Royal Institution of Chartered Surveyors (RICS) came as it said its research showed that housing sales were now at a 30-year low.

Claiming that government efforts had so far been limited, RICS has come up with its own set of suggested reforms.

The government is working on a package of measures to help the housing market.

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

The RICS report comes a week after the Nationwide said house prices fell 10.5% in August compared with the same month last year.

More mortgages

RICS is calling on the government to first help increase the number of available mortgages.

The market needs decisive government action on a range of fronts if it is to pull itself out of the doldrums
Gillian Charlesworth
RICS director of external affairs

To do this, RICS wants the government to 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.

RICS says such a move would help increase the number of new mortgage offers available.

The Bank of England currently does guarantee existing mortgage securities, under the Special Liquidity Scheme, but RICS wants it extended to new mortgage investments.

RICS also calls for the establishment of tax-free saving schemes to allow first-time buyers to more easily save for a deposit on their first property.

Among other recommendations, it wants to see is a short-term holiday on stamp duty, followed by a new lower rate.

RICS also called for government-backed mortgage rescue schemes to allow the current occupiers to continue to live in their property.

No silver bullet

"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," said RICS director of external affairs Gillian Charlesworth.

House price graph

"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."

RICS also calls for regulatory reform to make it easier for social landlords to develop and rent affordable homes, and reduced VAT (Value Added Tax) on repair and maintenance costs.

It further wants to see changes to the Home Information Pack to make it less costly.

The Conservatives described the RICS proposals as "serious options" which the government should consider.

The Liberal Democrats last week called for the introduction of a mortgage rescue scheme, which would allow families struggling with repayments to sell all or part of their house to a housing association or private firm and then stay in the property as tenants.


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