Save our Surveyors, says RICS

The trade body has come up with a wide-ranging plan to breathe some life into the housing market...

by
Last Updated: 31 Aug 2010

This morning the Royal Institute of Chartered Surveyors published a policy document called ‘Tackling the Credit Crunch’, a 15-point plan designed to resuscitate our ailing housing market. RICS insists the government must act now to prevent the market – and by extension the rest of the economy – suffering a catastrophic collapse in the coming years. The Government is due to publish its own proposals this week – and after the hapless Chancellor’s latest gaffe this weekend, he clearly needs all the good advice he can get...

According to RICS, there’s not a moment to lose. The trade body reports that house sales are now at their lowest level for 30 years, with most estate agents struggling to sell more than one house a week. And it can see no sign of improvement until something drastic happens. ‘The market needs decisive government action on a range of fronts if it is to pull itself out of the doldrums,’ said RICS director Gillian Charlesworth. ‘We need a joined-up, comprehensive approach to bring back confidence.’

First and foremost it wants to increase the supply of mortgages: it’s asking the Bank of England to guarantee a new issue of mortgage-backed securities, creating more money in the system to loan out (this would basically be an extension of the Bank’s Special Liquidity Scheme). Other suggestions include a new tax-free savings scheme that would allow first-time buyers to save up their deposit more quickly; reforms to the stamp duty rules (specifically, an initial holiday followed by a rate cut); and a state mortgage rescue scheme that will allow struggling borrowers to remain in their homes (an idea floated by the Lib Dems last week).

The problem is, of course, that all this would cost money – lots of money – and right now, the Government doesn’t really have any. It’s also going to be hard pressed to cut taxes like stamp duty when it’s desperate to refill the coffers. Equally, there’s an argument that it wouldn’t be right for the Bank of England effectively to subsidise mortgage lenders – since it will basically mean that the taxpayers carry the can if it all goes wrong. Some are arguing that the market should be left alone to correct itself after its previous excesses, however painful it ends up being in the short term.

So it’s unlikely that the Government will end up adopting all (or even most) of RICS’ suggestions. But it’s going to have to do something, regardless of the expense – or Gordon Brown's chances of hanging onto his job will be almost as slim as Darling's...


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