UK housing market is dysfunctional, says CML economist
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The UK housing market is “dysfunctional” and building more homes will fail to solve the problem on its own, a key industry figure has said.
Bob Pannell, chief economist of the Council of Mortgage Lenders (CML), said that activity in the market was “sluggish”.
In a blog, he argued that sales levels were the same as in the mid-1990s.
At that time, many people were facing negative equity and the stock of homes was much smaller, he said.
Reforming areas such as property tax would help, Mr Pannell said, alongside building more properties.
Credit crunch hangover
The CML is expecting more than 1.2 million housing transactions to be completed during the year.
Mr Pannell said that was slow, partly owing to a hangover from the credit crunch, but also the result of factors including:
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An ageing population seeing older people remaining in larger homes
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Landlords picking up a chunk of properties going onto the market instead of owner-occupiers
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The gap between property prices and earnings getting wider