As debate about the UK housing market continues, the Intermediary Mortgage Lenders Association (IMLA), the industry body for lenders who market their products primarily through intermediaries, comments on recent findings and discussions.
Despite woes for the wider economy, recent CML figures on buy-to-let indicate strength in the housing market. Whilst buy-to-let lending in the first quarter of 2012, at £3.7 billion (32,300 loans), was down 5% on Q4 2011 it was up by 32% compared to the same quarter in 2011. The arrears rate on buy-to-let mortgages continues to be lower than in the owner-occupied sector with three month plus arrears at 1.7% in buy-to-let against 2% for owner occupiers. Remortgage levels were also around 30% higher than in the first quarter of 2011.
Commenting on the housing market, IMLA executive director Peter Williams said: “The buy-to-let figures demonstrate that demand for housing in the private rented sector is high and we can expect it to remain so for many years to come. The debate now turns on how the Government addresses the very considerable housing challenges posed by an inadequate supply of homes and, falling home ownership. In his recent comments, at the BSA conference, Labour Chancellor Alistair Darling was right in recognising the requirement for a well thought out joined up housing policy, however, delivering it is something else. In the first quarter of this year there was actually a decline in the number of new homes under construction, number of starts fell 11% to 24,140 according to data from the Office for National Statistics. We often hear these promising statements from MPs but it always takes a long time for anything to be translated into action.
“We need a national debate on the issue of housing, not for next year, but for the next 50 years. A debate that shows we understand the importance of different tenures, the role of private landlords and how we can support them in this role.”
At another recent event, the HSBC Great Housing Debate in April, Yolande Barnes, director of residential research at Savills, supported the view that there would not be a return to “normality” and went on to argue: “It is the income streams of buy-to-let and not the capital investment which is going to be the next big thing in this market and while underlying demand is there it will continue to expand.”
Elsewhere, The National Housing Federation, the homelessness charity Shelter and the Chartered Institute of Housing, published their second Housing Report calling on the Government to do more to “get Britain building”to provide thousands of much-needed homes, with the benefit of stimulating the economy.
Peter Williams went on to say: “These recent discussions all support the need for the Government to look very seriously at the supply of housing overall, the role of home ownership and the private rented sector as an important part of this.”