Housebuilders say small government initiatives make buyers delay purchase
Government measures to kickstart the housing market have damaged consumer confidence, housebuilders have said.
A monthly report from CB Richard Ellis found housebuilders thought the temporary rising of the stamp duty threshold to £175,000 would have little impact in the south east because few homes sell below that price. The concession is being used to drive down the prices of homes in the £175,000 to £200,000 bracket.
One senior figure interviewed for the report branded last month’s government housing announcements, which included the stamp duty change, as “press spin that had failed”.
The research, based on monthly interviews with leading housebuilders, predicted new starts would plummet by 60 per cent in the run up to Christmas unless there was significant action from the government or Bank of England.
The report, done jointly with the South East England Development Agency, said small scale initiatives acted as an “alarm bell” to buyers who were concerned they might miss out on future savings and so delayed their purchase hoping for further initiatives.
Flats are most affected by the downturn, as they are favoured by first time buyers.
Housebuilders suggested that the government abolish Home Information packs, raise the stamp duty threshold to £250,000 to reflect houseprices in London and the south east, offer cheaper loans for first time buyers through the nationalised Northern Rock, link section 106 payments to market value, and abolish council tax on empty property.
Trevor Nicholson, director of national development at CBRE, said: "The findings of the Housebuilder Snapshot Report highlights concerns from the front line, and points to the need for a rethink on policy to support an industry that is important to the UK’s overall economic recovery in the long run."