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RICS sets out goals for the Government

The Royal Institute of Chartered Surveyors has set out guidelines for the Government as it calls for decisive action to save the mortgage market.

RICS says the Government needs to incentivise the issuance of new mortgage backed securities and covered bonds by allowing investors who buy them to enter into a repurchase arrangement with the Bank of England.

This suggestion has been also said by the Council of Mortgage Lenders, the Intermediary Mortgage Lenders Association and various other mortgage bodies.

The Institute thinks this process would use the same repurchase system as the existing Special Liquidity Scheme but would require the MBS or bonds to be sold in a public issue before being eligible for repurchase. It would also be specifically aimed at improving the flow of funding for new mortgage lending.

It also thinks a proportion of such lending should be allocated to first-time buyers, as well as creating a tax free savings account supported by Government contributions to help first-time buyers save for a deposit.

RICS also reiterates its call for the Government to introduce a short term stamp duty holiday, as well as offering mortgage rescue schemes that would see them buying a share in a home that is being repossessed.

RICS director of external affairs Gillian Charlesworth says: “The market needs decisive Government action on a range of fronts if it is to pull itself out of the doldrums and we call on Government to listen to the market’s solutions to a whole set of problems.

“We know there is no silver bullet that will slay this monster but we need a joined-up, comprehensive approach to bring back confidence and to give the public clarity about what is available.”

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