A housing minister who’s in it for the long term
Housing is not an issue that can be reformed overnight or even in a few months. We need someone who can look across housing, planning and mortgages as well as tenures and who wants to take a progressive view of the housing market.
We’ve seen 18 housing ministers in 20 years – this doesn’t allow for a long-term view to be taken or to fully understand the complexities of the market.
A minister with long-term vision might allow for proper decisions to be taken about issues like what balance of tenures are we aiming for? What role does the private rented sector play and what is the role of buy-to-let in this? What is the role of low cost and affordable housing as a fourth, intermediate, tenure?
A debate about the regulatory impact on the mortgage and housing markets
The UK Finance report ‘The changing shape of the housing market’ published recently highlighted the interaction between the FCA rules, the PRA requirement for no more than 15% of a lender’s business to be at more than 4.5 times loan-to-income (LTI) and the Financial Policy Committee’s recommendation for a stress test of 3% over a lender’s reversion rate.
These combined measures, and particularly the stress test, are preventing good, creditworthy borrowers from getting a mortgage and there are segments of the population who are currently under served.
The FCA has recently changed the rules on affordability to make it easier for those who can demonstrate a good payment record to change lenders – why not find a way to extend this to those who can demonstrate they are meeting higher rental payments?
The need for certainty
We need the uncertainty around Brexit to be ended so that government and policymakers can get on with other issues that have been stalled but are important to the housing and mortgage industries.
The future of Help to Buy and shared ownership, the direction of travel for social housing, leasehold reform, setting up a new homes Ombudsman and agreed standards on modern methods of construction, to name but a few, are all areas where progress has been slowed by activity elsewhere but where there are impacts on consumers today.
And yes, I know I said three wishes but given it’s Christmas I thought I’d add an extra one!
Ensuring customers of closed books are adequately protected
In publishing the modified affordability rules the FCA recognised that many of the customers of closed books currently sit outside its full regulatory protection.
Industry bodies, including UK Finance, are working closely with the FCA in its development of sources of information to help customers check if they are able secure a new mortgage deal under the revised criteria as the rules are implemented in 2020.
It’s likely that there will be products to help some creditworthy customers. However, it is also likely there will be a large number of customers who will not be helped by the new rules.
It would be good to see the new government open the debate on how to ensure that all customers, regardless of owner, are treated fairly.
