RICS comments on UK housing market
08 December 2003
The Royal Institution of Chartered Surveyors (RICS) has commented on the current climate of the UK housing market.
Two key reviews of Britain's housing market are expected to be released next week which explore the boom and bust nature of the UK market.
Their release should coincide with the Chancellor's pre-Budget address to Parliament on December 10th.
The Chancellor, who commissioned the reviews, is expected to comment on Britain's housing market.
Speaking on BBC Radio Four's 'The World Tonight' programme, Michael Ball of RICS explained: 'We have two problems with housing at the moment.'
He said: 'One problem is directly affecting our labour markets in that a lot of people can't get jobs because it's not affordable to have a house in the locality where they are going to get a job.'
Mr Ball added: 'The other problem we have with our housing market is that our taxation system is distorted towards home ownership and this creates a lot of problems, both in terms of house price booms, but also in terms of affordability.'
Continuing, Mr Ball underscored some of the 'significant' benefits of owning a house.
He said: 'The most important one is when you rent a house the landlord has to pay tax on the income they earn from your rent.'
'Whereas when you live in your own house, you are implicitly paying your rent to yourself, but you pay no tax on it, and that's one of the reasons why we have such a small rental sector', remarked the RICS official.
One of the two reviews conducted by Professor David Miles of Imperial College London will investigate long-term fixed-rate mortgages.
Whilst the second study, carried out by Kate Barker of the Monetary Policy Committee, will look into the increasing deficit in the quantity of new houses needed.