Lenders slam lack of direction in housing policy

Williams-Peter-700.jpgMortgage lenders are frustrated by the “merry-go-round” of housing ministers and a lack of direction in policy, the latest survey by Imla reveals.

The Intermediary Mortgage Lenders Association found that three-fifths of lenders feel that constant ministerial reshuffles are negatively impacting government housing policy.

The trade body urges Theresa May’s new Conservative administration to back private housebuilding, social housing and shared ownership in the upcoming Autumn Statement.

When Gavin Barwell was unveiled as the new housing minister in July, he became the sixth politician to assume the role since the start of 2010, following John Healey, Grant Shapps, Mark Prisk, Kris Hopkins and, most recently, Brandon Lewis.

Almost three-fifths (59 per cent) of lenders say this state of flux has adversely affected the mortgage and property markets, with two-fifths (42 per cent) of intermediaries agreeing.

Imla suggests that one possible solution to the revolving door could be the establishment of an independent, less party-political housing department. It found that 59 per cent of lenders support this concept, while 48 per cent of brokers backed the idea.

The role of housing minister has not been a Cabinet-level position since it was downgraded in 2010, but around half of lenders (52 per cent) think reinstating this status might help. However, only a fifth of brokers felt this would make a difference.

Brokers and lenders were united in the belief that Theresa May’s regime will continue to prioritise first-time buyers – despite confirming the closure of George Osborne’s Help to Buy mortgage guarantee scheme.

Both lenders and brokers responded that private housebuilding should be higher up the agenda. Lenders also identified social housing and shared ownership as key priorities for Government support, while brokers are keen to see more focus on last-time buyers.

Imla’s research also shows two-thirds of lenders believe the Bank of England’s Financial Policy Committee will be granted powers of direction in the buy-to-let market by the Treasury.

Three-quarters of lenders believe that Chancellor Philip Hammond will push ahead with the plans of his predecessor George Osborne to reduce mortgage interest tax relief for landlords, along with 52 per cent of brokers.

Imla executive director Peter Williams says: “The Government’s lack of clear, structured housing policy has been an elephant in the room for some time now.

“Successive administrations have made pledges and promises to change this, but it’s never been fully followed through with any real comprehensive long term policy.

“Initiatives and schemes have stimulated bursts of activity and the mortgage market itself has adapted to evolving consumer needs over time, but until such fundamental issues as the continued under-supply of housing, the backlog of unmet demand and the role of different tenures are properly addressed then the same issues will crop up time and again.”