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Royal Institute of Chartered Surveyors Slams Government

Royal Institute of Chartered Surveyors Slams Government

Government Not Doing Enough
To End Housing Shortage

A recent study by the Royal Institute of Chartered Surveyors (RICS) has shown that the Government still are not doing enough to alleviate the chronic shortage of residential housing in the UK.

The Royal Institute of Chartered Surveyors have again stated that successive governments have failed to produce a coherent long-term strategy for UK housing.

The RICS housing commission may concede that some of the coalition government’s policies are producing short-term help for the UK house building industry but they are prepared to argue that successive ministers’ lack of consistency in policy over the past 50 years has exacerbated the failures of the UK property market.

The Royal Institute of Chartered Surveyors think that current Government housing policies are merely clearing up the problems left by their Labour party predecessors, and current government ministers are struggling to find a viable alternative solution to the current housing shortage.

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New research from the Centre for Economics and Business Research (CEBR) shows UK property prices rising by 0.8% in 2012.

CEBR confirm a view that has remained fairly consistent for the last 3 years, that low interest rates and an increasing availability of mortgage products suitable for First Time Buyers (FTB’s), next time buyers and Buy To Let Landlords will help UK residential property prices creep up over the 2012-2016 period, reaching pre-recession levels in the second quarter of 2016.

The CEBR based its forecasts on a mix of micro and macro factors.

  • The key micro factor is the shortage of housing relative to potential household formation.
  • The key new micro issue is the changes in the planning regulations re-announced in the Budget.

These are likely gradually to boost the supply of housing and will constrain the gentle rise in house prices.

The key macro factors are

  • Affordability
  • Employment
  • Mortgage availability

The first of these will be slightly positive, the second slightly negative and the third increasingly positive.

The CEBR expect the mortgage famine to ease gradually as further quantitative easing flows through the economy and as banks recapitalise themselves.

“House prices have been pretty stable over the past two years” says Shehan Mohamed, main author of this report “Lending for housing was £74.5 billion in 2011 and we forecast that this will rise to £109.9 billion by 2016”.

CEBR’s regional house price analysis, also included in the report, shows house prices are likely to continue to rise more quickly in the London and the South East, though the gap in house price inflation with the rest of the country is likely to close because of the 7% stamp duty and the heavy taxation on corporate home ownership announced in the Budget and because of the non-recurrence of special factors like the Arab Spring and the euro crisis which boosted the London market in 2011.

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