Jump to content
House Price Crash Forum

Cml "the Housing Market Remains Stuck In A Rut"

Recommended Posts

Gross mortgage lending in February was an estimated £9.5 billion, according to new data published by the Council of Mortgage Lenders. This is almost identical to January's gross lending figure of £9.475 billion and marginally (less than 1%) higher than the £9.419 billion in February 2010.

Although lending remains weak overall, stronger remortgage activity has continued into the early months of 2011. While there has been a seasonal pick-up in house purchase demand over recent weeks, this appears to be weaker than a year ago despite the fact that there was a lull at the start of 2010 following the expiry of the (earlier) stamp duty concession at the close of 2009.

Commenting on today's gross lending figure, CML chief economist Bob Pannell said:

"There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011, and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market.

"The housing market remains stuck in a rut and, while we do not anticipate much relief in next week's Budget, it does present an opportunity for the chancellor to address the reform of stamp duty. What we have instead is the introduction of a new 5% band. That is an irrelevance for the majority of home-buyers but another indication of the haphazard and arbitrary nature of this tax, where reform is long overdue."

Link to post
Share on other sites

I have to say, though, I agree with them about stamp duty.

If you earn over £37,400 per year, you don’t suddenly pay 40% income tax on your entire earnings, so why should it be the case that when buying a home for £250,000 you pay 3% stamp duty on the entire amount? It places an artificial barrier at a certain point of the market. The same, presumably, goes for the increased rates above £500,000 and a million.

The rates should be revised in such a way as to maintain the overall tax take from stamp duty, but so that each band only applies to the purchase price over and above the threshold, not to the whole amount. I find it odd that nobody in the media or in politics has ever, to my knowledge, questioned this particular point.

Also the CML are right about the housing market being ‘stuck in a rut’. Here in South Edinburgh the word I use is ‘constipated’: there is very little coming to the market (no forced sales), and what there is for sale tends to stay for sale for a very long time (excessive asking prices).

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.