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Labour’s housing proposals ‘tinker’ with demand: Rics

Labour’s housing proposals ‘tinker’ with demand: Rics

Proposed stamp duty reforms by the Labour party could help some first-time buyers but another measure tinkers with demand-side stimulus, the Royal Institution of Chartered Surveyors said in response to the Labour party proposals.

Yesterday, it was announced Labour leader Ed Miliband was set to announce plans to scrap stamp duty for most first-time buyers with an exemption up to £300,000 if they win the general election, as the part ramps up its property policy offensive.

This move is estimated to save first-time buyers buying up to the maximum allowance £5,000.

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Jeremy Blackburn, head of policy at Rics, said: “Prices are already predicted to rise in the next parliament and this is only likely to make matters worse. The promise of one million homes by 2020 is an ambitious target, but Labour has not fully explained how they expect to remove obstacles to such a supply-side revolution.

“The details on ‘first call and ‘local first’ will be key, as on the face of it, these both look difficult to legislate for, and their efficacy could be undermined if they are only voluntary measures.”

Mr Blackburn added that balancing these with much-increased house building and supply-side reforms is key.

He warned that none of the three main party leaders have shown themselves ready to grapple with the “thorny issues” that block a solution to the housing crisis.

“What we need is a drastic increase in supply across all tenures. Building one million homes by 2020 is an ambitious target towards that end but does however require a joined up, coherent housing strategy, based on the kind of analysis we have said only a housing observatory can provide.

“This ‘OBR for housing’ will draw on the expertise and knowledge across the sector to assess the underlying economic and social drivers of housing and provide the impetus for solutions.”

Mark Hayward, managing director at the National Association of Estate Agents, described the plans as a “real vote swinger” for those looking to step onto the housing ladder.

He said: “Scrapping stamp duty for homes under the price of £300,000 would only mean good things for hopeful first-time buyers.

“For many, hidden costs such as stamp duty can be the difference between being able to afford a home, and not being able to afford one. Our recent research showed that just under a third of house sales were made to first time buyers, and hopefully we’ll see this significantly increase over the next three years.”

John Cridland, director general of the Confederation of British Industry, said: “It is right to help first-time buyers get onto the property ladder, which could also provide a boost to the economy and the housing market.

“We urgently need more homes for people to buy, which is why the number one priority for housing policy must be building 240,000 new properties each year.

“We look forward to seeing more detailed costings and timelines for these proposals.”

ruth.gillbe@ft.com