Leading property experts and economists in the UK are to examine the real estate market and try to work out how the cycle of boom and bust can be avoided in the future.
The Joseph Rowntree Foundation, a leading housing organisation, has set up a taskforce to develop a series of long-term policy options that will challenge the root causes of instability in the property market that have led to such a damaging cyclical pattern.
‘Though the scale of the current economic turmoil and its global nature is unprecedented, there are similarities with past downturns and it is obvious there has been a failure in policy and practice,’ said Julia Unwin, Chief Executive of JRF.
‘There is no better time to grapple with the fundamental questions surrounding our housing market model. The evidence shows that without effective intervention this cyclical pattern will continue and the housing market could boom again within five to ten years of recovery, she added.
A major part of the work of the taskforce will be to look at ways of discouraging the up take up of risky mortgages which is regarded as a major cause of the current property crisis in both the UK and the US.
Key questions will be probed including whether or not home ownership has been over promoted in the UK and an examination of rental alternatives. Unwin said it was also important to look at what is an acceptable level of consumer risk. ‘It is vital that we establish a long term vision for the housing market that is both sustainable and just,’ she added.
Among the members of the panel are Dr. Peter Williams, a consultant on housing markets and housing policy, Keith Exford, chief executive of the Affinity Sutton Group, and Elaine Kempson, professor of personal finance and social policy and director of the Personal Finance Research Centre at Bristol University. The Taskforce expects deliver its recommendations by the end of 2010.