Councils 'should buy up houses'

HOUSING associations and local authorities should be encouraged to buy or lease vacant homes in an attempt to boost the housing market, the Institute of Housing said yesterday, writes Robert Chote.

The institute argued that 50,000 unsold houses could be bought using pounds 1bn of frozen proceeds from council house sales and pounds 2bn in borrowings, which would later be recouped from higher corporation and income tax, and lower unemployment benefit payments.

This would provide affordable accommodation for low-income families and help stimulate the market by soaking up some of the houses that are surplus to demand.

The institute said demands for the extension of the suspension of stamp duty - which will be lifted at midnight tomorrow - were 'a call for further subsidy for owner occupiers'.

The report argued that owner occupation was unsustainably high at 70 per cent, with Britain now having more mortgage debt in relation to disposable income than any other European country. 'Home ownership can no longer be promoted at the expense of other forms of tenure', it said.