I was interested to read the recent quarterly report from the Halifax House Price Index which reported that house prices were now 1.9% higher than they had been in the previous 3 months. They also indicated that market activity has improved with sales in 2012 at their highest level for the last few years.
In relation to market activity this certainly accords with my feeling for the start of 2013. I was recently commenting to a colleague that so far in 2013 (to 15 February 2013) I have offered on more closing dates than I did in the whole of 2012 and, although at this stage, I am not seeing any particular rise in house prices I hope that increased activity and stronger market sentiment will point towards an improving housing market.
I enjoy reading David Smith’s economic column in the Sunday Times business section and his recent article about the new Governor of the Bank of England was very thought provoking. I am of the view that the new Governor should look at ways to increase lending in the housing market which will have a positive impact on the economy as a whole. I would also urge the Chancellor, working closely with the new Governor, to come up with a Government organisation to ensure a steady flow of funds into the UK property market and to act as a stabiliser if either prices start increasing too rapidly or if mortgage funds dry up – both of these scenarios we have experienced over the last decade.
How could this be funded:-
1) Tweaks to the Stamp Duty regime.
2) Tightening up on the Capital Gains Tax Rules in relation to property.
3) Direct contribution from the Bank of England.
I hope the new Governor understands the importance of the housing market to the UK economy and takes steps to assist.Lindsay Darroch Partner and Head of Property