The coalition government’s blueprint last week, like the Liberal Democrat and Conservative election manifestos, made pretty uninspiring reading for the mortgage market.
There was plenty about the banking sector in general and bringing empty homes into use and promoting shared ownership. Fine and dandy, but where was any reference to increasing the amount of funding in the market? It seems pointless to talk about building more properties if you don’t also talk about improving access to affordable finance at the same time.
And if getting people onto the property ladder is not a priority, where are the tax breaks and other measures to encourage landlords and institutional investors to provide affordable rental accommodation? At the moment the government seems heavy on rhetoric and short on anything of value. The only decisive action we’ve seen so far has been the axing of Home Information Packs. Pre-election, the Conservatives had two Labour creations in their sights – the Financial Services Authority and HIPs.
The new government has held fire on the FSA but it had no compunctions about pulling the trigger on HIPs. The much talked of 100-day consultation over the scheme’s future proved to be a diversionary tactic as the coalition positioned itself for the kill. There is no doubting that HIPs have been a disaster. Rather like the moveable feast we saw with the justification for entering Iraq, Labour’s rhetoric went from speeding up the house-buying process to saving the planet. Labour had gutted the HIP before it was even launched, with the removal of the Home Condition Report.
But the coalition will need to do more than put half-dead legislation out of its misery if it wants to get the mortgage and housing markets back on track.