Estate agents want Government help

ESTATE agents from Essex and Suffolk have called on the Government to cut red tape and give more help to stimulate the housing market in the face of the current property slump.

Elliot Furniss

ESTATE agents from Essex and Suffolk have called on the Government to cut red tape and give more help to stimulate the housing market in the face of the current property slump.

Agents have said first time buyers must be offered more financial support from both the Government and the nation's banks in order to get the market back on track.

Yesterday a package of measures to encourage banks to lend to small and medium sized businesses was unveiled and property traders have claimed the same sort of backing should be available to those looking to get into the housing market.


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David Grier, of East Bergholt's Grier and Partners, said the market needed to be freed-up for first time buyers, but scrapping HIPs would make little difference to the broader market.

He said: “The HIPs stuff is not the end of the world. A lot of people who are looking to sell have got that sort of money.

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“What would help is freezing or lowering stamp duty. In the more rural parts of north Essex first time buyers aren't such an issue but if you have got a house to sell then you are dependent on a chain.”

Shaun Humphrey, of Jennie Jones estate agents in Aldeburgh and Saxmundham, said he too would like to see a lowering of stamp duty and more support for first time buyers.

“One of the things the Government could look at further is taking away the upper stamp duty limits of �250,000 - that would help the middle market,” he said. “We also need to be able to give people flexibility to borrow more money. At the moment most banks will require a 15% deposit. One of our clients for example wants to move down market - they are selling a house for �150,000 and they owe �150,000 to their building society. They want to buy a property for �135,000 so they are being sensible. However they can't sell to buy because - although they will cover the outstanding cost of their mortgage - they can't borrow a new mortgage because they won't have a deposit.

“There are a lot of people trapped in that situation. Lending policy conspires against them - there needs to be more schemes to support the banks such as top up grants and loans to help fund those deposits. This in turn would encourage more first time buyers and allow people to get moving.”

Ralph Rouse, who works at family firm Rouse Estate Agents in Frinton, said the immediate scrapping of Home Information Packs (HIPs) would be a small step in the right direction and banks should be encouraged to lend to new buyers at better rates.

He said: “We need to scrap HIPs - it's a waste of time and money. Also we need to get rid of all the fat cats in the banks and lend money again - but not at 105%.

“There's got to be light at the end of the tunnel - as soon as youngsters can get on the first rung of the ladder, that's what's going to do it. They (the Government) are allowing banks some money but the banks are not lending more - they're being difficult.”

Mr Rouse, 83, has been in the business for 40 years and said the current financial crisis was as bad, or even worse, than the recessions in the 1980s and 90s, but things would “perk up” eventually.

James Bedford, of Bedfords estate agents in Bury St Edmunds and Aldeburgh, said the Government needed to generate greater confidence in the market.

“What the Government should be doing is leading by example and stop borrowing money,” he said. “They need to find a way to get the banks to make money easier to borrow. People want to buy property but they can't get a mortgage.

“I don't think HIPs are the problem. However, we could do with a reorganisation of stamp duty - but not necessarily get rid of it completely. I would like to see incremental increases rather than paying 4% duty on the whole cost. For example pay 1% on properties up to �250,000 and 3% on properties up to �500,000. You could also introduce a threshold at �750,000 or �1m.”

John Palmer, of Palmer and Partners of Colchester and Ipswich, said offering a good rate to first time buyers was the “key thing” that needed to be done for the industry to recover.

“The key issue is the liquidity of the market,” he said. “It's part of the bigger economic picture, but if the housing market was more stable then there wouldn't be quite so many redundancies going about.

“At some point this year the housing market will bottom out and pick up again.”

A spokesman for the Government's department of Communities and Local Government said it “absolutely disagreed” with any suggestions that HIPs were having a negative impact on the market.

He said: “Previously published independent research by Europe Economics has found HIPs are not impacting on house prices or hindering transactions.

“The main factors affecting the market continue to be mortgage availability and interest rates. A recent independent survey of 16,000 transactions showed where a HIP was available, exchanges were on average actually completed 6 days quicker.”

Last night a spokesman for the Treasury said: “As the Chancellor has said, we are looking at what else we can do to support the economy, in particular, whether there are further measures we can take to support lending and he will make announcements in the coming weeks.”

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