Housing to top political agenda, says CML

The Council of Mortgage Lenders says housing will be near the top of the political agenda with Gordon Brown in power.

Upon taking over the Labour party leadership, Brown declared that in 2007, housing will be a priority and pledged to do more to provide greater levels of home ownership and end the situation where young people cannot afford their own homes.

He also pledged to increase the number of homes built each year up to 200,000.

More specific to the mortgage industry, he has called on lenders to show sensitivity to the group who have got themselves into real difficulty with debt.

However, despite the change in emphasis, the CML says there is yet to be much in the way of clear new policy, although housing minister Yvette Cooper will now attend cabinet meetings when necessary.

The government has been pushing the need to build more homes for some time.

The target of 200,000 new homes per year was part of its response to the Barker Review of housing supply, but is in fact lower than official projections for how quickly the number of households in England is set to increase over the next 20 years (more than 220,000 per annum).

A spokesman at CML, says: “The initial response to the demand for more homes was a push by planning authorities to encourage builders to build more homes on less land.

“Consequently, the share of new homes built as flats has risen from around 20% at the turn of the millennium to around 50% at present.

“This has led to concerns that, not only are too few new homes being built, but also that the mix does not adequately reflect the need for family homes.

“However, if there were to be a shift to building a greater share of family sized homes, due to a change in government policy, house-builders have raised concern that lower build densities would mean fewer homes built unless additional land becomes available.

“There are also questions over whether there is a pool of labour available to meet a rise in construction.

“Despite the long-term pressures from demand, the immediate prospects appear to be for housing market activity to ease.

“Bank of England deputy governor Sir John Gieve added weight to the view that rates may have further to rise and may stay higher for longer.”