Bacon might yet be back for fourth housing report

Talking of price rises, Dr Peter Bacon is having his third shot at cooling the rapidly overheating housing market.

If the success of his plans to date is anything to go by, he could be back for a fourth try sooner than anyone would care to imagine. Indeed, announcing its adoption of his recommendations, the Government already had one eye on the fact that it might need to revisit the issue in the near future.

The problem is very simple . . . if house prices rise to a level that single people and young couples buying for the first time can no longer afford the market will implode. We all know how that played out in Britain.

Even sooner though, the pool of labour available to the economy will dry up as people simply refuse to move to where the jobs are because they cannot get accommodation at a reasonable price. Even renting is not the answer. Limited availability and rapidly rising rents are curbing growth in that sector.

The Government and Dr Bacon seem sure that easing stamp duty for first-time buyers, combined with raising taxes on owner-investors and those sitting on land suitable for housing, will ease the problem. The consensus appears to be that the measures are more likely to raise prices than to ease them and will do little to increase the availability of serviced land for housing.