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The UK government needs to review its current housing policy and commit to a managed withdrawal of current property market support as a priority, according to the Intermediary Mortgage Lenders Association (IMLA). It has published its criteria for housing and mortgage policy pledges in the build-up to the 2015 election and says that with owner occupation set to fall from 64% to 59% in the next parliament, an ‘open and frank debate’ is needed about whether conservative lending benefits all. The IMLA argues that a clear overarching housing strategy is an essential requirement for the next government. This would replace a policy focus that has frequently favoured short term, eye catching and also conflicting measures over the last 30 years. As a result, successive governments have prioritised specific market segments at the expense of others rather than following a cohesive strategy across tenures and parliaments. In its paper UK Election 2015 – criteria for housing and mortgage policy pledges, IMLA also asserts that regulators’ response to the financial crisis and lenders’ responses to the new rules and their supervision have created a more conservative mortgage market. With owner-occupation set to fall from 64% to 59% over the next five years over the next parliament, the IMLA calls for the next government to ensure a more appropriate balance of choice and protection for consumers, in place of fragmented policies and regulatory interventions. The document sets out five specific requirements that should be tackled by the next government. These include establishing a programme for a properly managed withdrawal of government measures supporting the housing market and implementing a state or privately backed mortgage indemnity guarantee (MIG) to succeed Help to Buy and support high loan to value (LTV) borrowing in the long term. It also includes introducing measures to support downsizing by older households and increase liquidity in the housing market, carrying out a full review of the cumulative impact of regulatory changes for mortgage lending, including new capital adequacy requirements, macro-prudential rules and affordability assessments and engaging in an open discussion on the role of the sub-prime mortgage market in helping to meet consumer needs. ‘There are difficult and worsening housing problems across most of the UK, which mean the housing and mortgage markets will be a dominant issue in the 2015 election. A number of key agendas demand a response from politicians, and the consequences of their actions are likely to be felt for many generations to come,’ said Peter Williams, IMLA executive director. ‘We need to recognise that tenure patterns are changing and there is a wider diversity of housing needs in modern society than ever before. Home buyers face much greater challenges as a result of house price rises and financial services regulation. Private renters are confronted by high rental inflation and variable quality and social renting no longer provides an adequate safety net for those who cannot afford to house themselves via the market,’ he explained. He pointed out that a… Continue reading →
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