On the eve of another interest rate decision, the National Association of Estate Agents (NAEA), called on the Chancellor and the Prime Minister to ease pressure in the housing market through temporary tax relief.
Peter Bolton King, Chief Executive of the NAEA, said: ‘The NAEA is calling on the Chancellor and Prime Minister to consider other options to give people a break such as a stamp duty holiday for first time buyers and temporary tax relief on the mortgage interest of people’s primary residence. This would at least ease the difficulty that people in this country are facing and give them the confidence boost that is needed to the market to get back on a more positive footing.
‘The housing market is vital for our economy and the Bank of England has to make a decision about interest rates. But what is clear is that interest rates are dislocated from the situation and that the banks are not passing on any interest rate benefits to customers, if anything the mortgage rates are getting tighter. Clearly, more action needs to be taken to ease pressure in the markets.’
This statement comes as new research from Hometrack found 28.3% of younger buyers are unable to secure a property in their local area. ‘While house prices are falling, access to the property market is being increasingly limited by the costs and more restrictive terms of a substantially reduced supply of mortgage finance,’ explained Steve Wilcox of the University of York, who carried out the research.
‘Without further measures to restore the availability and accessibility of mortgage finance there is the risk of a severe downturn, with all the harmful consequences that this entails.’