Lowering estate agent fees and replacing Stamp Duty with a land value tax could help boost property transactions, a new report claims.
Research compiled for the Council of Mortgage Lenders, studying the decline in home movers, looks at reasons behind falling property purchases and how to get the market moving.
The report, Missing Movers: A Long-Term Decline in Housing Transactions?, is written by housing market commentator Neal Hudson and property analyst Brian Green.
A survey as part of the report found that a quarter of mortgage holders were put off moving by Stamp Duty, and estate agents’ and solicitors’ costs.
It found transactions have fallen from 1.64m in 2007 to 860,000 in 2009 before bouncing back up to 1.23m, leaving a shortfall of 400,000, 80% of which were home movers.
In 2016 transactions stood at 1.23m having fallen to 860,000 in 2009, as the credit crunch throttled the housing market.
The report found that a lack of funds, specifically equity in their home, was a key factor stopping many moving.
Several solutions are put forward, such as relaxing lending criteria and incentives including equity or bridging loans as well as negative measures in the form of progressive land or property taxes.
Looking at land value taxation – a form of which was proposed in the Labour Party election manifesto – the report cites the Mirrlees Review, analysis by the Institute for Fiscal Studies, that suggested replacing Stamp Duty and council tax with a land value tax in 2010.
The CML report said: “The benefits in regard to household moves are strong. In addition to the case made by The Mirrlees Review for the greater fairness of a land value tax, it suggested that the Stamp Duty defies the most basic of economic principals by taxing transactions. This clearly reduces the propensity to move.
“Furthermore, the introduction of a land value tax may encourage the more efficient use of the housing stock.”
The authors express support for this but admit a land value tax has been seen as controversial and considerable thought would be needed as well as transitional arrangements.
So they’ll naturally be waiving their survey fees, admin fees and arrangement fees too then?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Pot and kettle much? Survey fees, product fees etc etc.
We’re also noticing a massive slow down in survey turnaround times, currently a 3 week wait from instructing survey to it actually being done, that’s in Manchester at least.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Couldn’t get passed the headline.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Bearing in mind in the last few years, mortgage arrangement fees have gone from hundreds to thousands of pounds, the booking in of surveys is now often 4-5 weeks rather than 2. Advisers in branch are too snowed under to see people creating a slowing up of the application process and underwriters also seem overworked. But hey, why look at your own bottom line, easier to push it on to estate agents who are normally responsible for everything. It was raining last week, and i half expected someone to blame our fees for that as well!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Maybe the CML should be up front to where the big bucks go.
When a mortgage is set up. The lender sets up an account for the borrowers to pay their monthly payments in to. (The mortgage debt).
Then in 80% plus cases the bank or building society sell the mortgage (future payments on) its called SECURITISATION. Thats where the big bucks are made.
Banks then clear down their books to appear healthier and the funds raised from selling the future mortgage payments banks re lend.
Agents fees being screwed and screwed down can only harm what good agents do and the results consumers get.
The WHICH survey showed that portals fail to achieve 57% of solds
Increasing agents fees would be much more healthy to give agents more funds in the pot to do more (away) from portal marketing.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register