Regulation and the mortgage industry’s self imposed caution after the financial crisis have hard-wired into the UK a lower level of home ownership, warns the Intermediary Mortgage Lenders Association.
In a report titled ’Rebalancing the housing and mortgage markets” published last week, IMLA says that the continuing limits on the supply of mortgage finance, along with new Basel III and FCA regulatory requirements are all significant barriers to the scale of recovery which can be achieved in the current market.
It also argues that while the Funding for Lending Scheme and Help to Buy have been introduced to produce economic growth, there has not been a wider debate on the long-term purpose of the private housing and mortgage markets.
The report states: “The regulatory response to the financial crisis and the industry’s partially self-imposed caution has ‘hard- wired’ in a lower level of home ownership.”
Professor Steve Wilcox at the University of York’s Centre for Housing Policy authored the report with input from members of IMLA including banks, building societies and specialist lenders. IMLA members account for around 70 per cent of mortgage lending through intermediaries.
It says there is little likelihood of UK home ownership levels getting back up to the previous peak of 72 per cent in 1993 unless both the scale of mortgage finance and the controls on access to it change from the current position.