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Property boom and bust cycle "must end"

Thursday, 19 May 2011 11:47 AM

A group of experts has called for urgent and fundamental reform of the housing market to stop another boom and bust cycle occurring.

A Housing Market Taskforce convened by research charity the Joseph Rowntree Foundation (JRF) says policy-makers have failed to learn lessons from persisent boom and bust cycles over the last 40 years, and that the UK has one of the most volatile markets in the world.

Its report recommends a series of policy options that would create more stability and help increased numbers of people get on the property ladder at the same time as protecting existing homeowners.

The experts say an increase in the supply of new homes is essential but will not be enough on its own to reduce volatility.

They want changes to stamp duty and also suggest that council tax is reformed with more bands. The taskforce’s eventual aim is for the UK to have a national property tax with safeguards for lower income families.

A new safety net for homeowners would include measures to get banks to lend responsibly and a new insurance system for people who lose their job or fall ill.

JRF chief executive Julia Unwin said: “We have set out to provide a series of policy options that together would help provide long-term stability in the market. I urge policy-makers to look at these and act now, because the seeds of the next housing boom have already been sown.”

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