They (want to) own land! Give them money!

From Estate Agent Today:*

Countrywide, the UK’s largest estate agent, has called on the Government to act now to boost the property market, saying that the current low level of house sales is ‘unsustainable’. The NAEA has also made representations to Chancellor George Osborne, asking for there to be no further property taxes but for Stamp Duty to be reformed.

Countrywide is calling on Osborne to introduce mortgage relief for first-time buyers, set tough mortgage lending targets for banks, provide tax breaks for the private rented sector, and introduce incentives for development projects.

Grenville Turner, group chief executive of Countrywide, said: “A recovery of the housing market is fundamental to economic recovery. Current transaction volumes are simply not sustainable. Based on current levels of activity, the average home owner moves house once every 25 years as opposed to [the historic norm of] once in every 12 years. This has wider implications for society, the labour market and the UK economy. The valuable economic contribution that the property market makes is being overlooked and there is a risk that current Government policy will be ineffective or, even worse, cause unnecessary volatility."

That's about as ass-backwards as you can get.

Quite clearly, estate agents like it when there are lots of purchases and sales, so if they want more people to move home, they ought to be calling for lower taxes on earned incomes, higher taxes on land and buildings and an end to subsidies of this nature, such as Support for Mortgage Interest, which enables people to hang on to a home they wouldn't be able to otherwise afford, thus preventing somebody who can afford it from buying it and not nudging the SMI claimants into buying somewhere cheaper.

As it happens, they are correct to claim that people moving home is important to the economic recovery, because by and large, people will move to where they can earn the most, even if they (as estate agents) are merely saying this out of naked self-interest.

The three specific measures they propose will all merely have the effect of pushing up the price of land and will not affect transaction volumes one iota - and tax breaks for the private rented sector will probably reduce the number of transactions (but boost income of letting agents).

We know from Nationwide's own chart that when MIRAS was phased out last time, the net amount which first-time buyers were prepared to pay remained unchanged - it was the people selling up who lost the benefit of the subsidy (and the income taxpayer in general who gained, because one man's tax break is another man's tax burden):* Via SBC at HPC.

UPDATE; Bob E has read to the end of the article and alerts us to this bit: "Among its other suggestions are a cap of 25% affordable housing units per development, to help builders achieve viability and produce more marketable schemes."

Righty-ho, make housing more affordable by pushing up the price and having less "affordable" housing.