CML and NAEA urge Government action to restore housing market confidence

| March 5, 2008 | 0 Comments

The Council of Mortgage Lenders (CML) has called on the Government to ease the slowdown in the housing market by reducing stamp duty.

The Council believes such a move would promote buyer confidence and encourage potential first-time buyers to get a foot on the property ladder.

Recent research from Halifax has established that in 29% of local authorities across the UK, the average stamp duty bill is equivalent to over 20% of average annual gross earnings.

Halifax also asserts that if, from 1997, the higher stamp duty threshold had increased in line with house price inflation, the £250,000 band limit would be raised to £720,000, while the £500,000 limit would be raised to £1,440,000.

The CML is also urging the Government to provide better support for homeowners in financial difficulty, through the income support for mortgage interest scheme (ISMI).

It is suggesting that ISMI payments could be accrued as second charges on properties of homeowners who might otherwise face repossession.

Meanwhile, the National Association of Estate Agents, the UK’s leading professional body for estate agents, has called for a further reduction in interest rates.

Peter Bolton Kind, chief executive of the Association, believes that prospective homebuyers are being “squeezed” by the banks’ demands for larger deposits and high credit ratings.

He has called on the Bank of England’s Monetary Policy Committee to “act fast” to prevent the housing market from stalling through lack of confidence.

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