The lending industry in the UK is ready to work with the Government’s ambitious plans to build more homes more quickly as outlined in the first housing policy paper for years.
The Council of Mortgage Lenders (CML) which represents over 90% of lenders, welcomed the publication of the Housing White Paper and said members will work to help aspiring home buyers.
It also suggested that lenders are increasingly willing to work with buy to let landlords at a time when more homes are needed in the private rented sector.
The CML highlighted the Government’s desire to encourage the development of modern methods of construction as a means of increasing housing supply and making homes more affordable. It said that the lending industry is ready to help the construction sector to draw on technological developments to build homes that are durable and mortgageable in the long term.
‘Lenders already contribute to the funding of private and social rented housing, as well as owner occupation, so we welcome and are comfortable with the cross tenure approach in the white paper,’ said CML director general Paul Smee .
‘We are now ready to work with the Government, and with members and others, on the detailed implementation of these proposals. We want to play our part in developing a coherent, long term plan to deliver more housing and help ensure that it is durable, affordable and in the locations and tenures that people want,’ he added.
The White Paper is a good start in terms of developing a tenure neutral approach to housing policy, according to John Heron, managing director of Paragon Mortgages, particularly the plans to engage with local people and smaller house builders who will help to increase the supply of new homes.
‘We are disappointed however that the Government is pushing forward with plans to reduce the amount of mortgage interest tax relief available to landlords which comes on top of a reduction in the wear and tear allowance and an increase in stamp duty for landlords. These policies have already resulted in reduced investment in the private rented sector over the last 18 months and will continue to do so and this doesn’t sit well with the White Paper’s call for increased supply,’ he pointed out.
‘The vast majority of properties are owned and managed by private landlords with small portfolios, often consisting of one property. The Government’s proposals seem to suggest that institutional investment can meet all the growth required to satisfy tenant demand and replace the private landlords who have exited due to the Government’s tax strategy,’ he explained.
‘There is a lack of joined up thinking between the Government’s housing policy and its tax strategy. Institutional and private investors in the PRS can coexist and be mutually supportive but we need a policy environment that reflects the vital contribution which both can make,’ he added.
Charles Haresnape, group managing director of mortgages at Aldermore, said it is positive that the Government has looked at providing the right type of housing in the right places through a new assessment of housing needs.
‘The Government seems to be exploring a wider range of options for addressing the need to build more homes through planning reform, incentivising authorities to look again, and by helping smaller developers, all of which is very welcome,’ he added.
