The Intermediary Mortgage Lenders Association (IMLA) has published its criteria for housing and mortgage policy pledges [attached] in the build-up to the 2015 election – and challenged politicians to commit to a root and branch review of current housing policy.
IMLA argues that a clear over-arching 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 – has created a more conservative mortgage market.
With owner-occupation set to fall from 64% to 59% over the next five years over the next parliament¹, 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
- 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
- Introducing measures to support downsizing by older households and increase liquidity in the housing market – along with a review of lending into retirement
- 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
- Engaging in an open discussion on the role of the sub-prime mortgage market in helping to meet consumer needs.
¹ Source: DCLG/IMLA – based on analysis of current trends
Peter Williams, Executive Director of IMLA, comments
“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.
“We need to recognise that tenure patterns are changing and there is a wider diversity of housing needs in modern society than ever before. Homebuyers 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.
“A ‘one-size-fits-all’ solution for housing policy is no longer viable, if it ever was. A root and branch review is essential if these conflicting priorities are to be addressed in a coherent manner. It is also time to put an end to ‘sticking plaster’ solutions that are barely effective in the current parliament. Housing is a long term challenge that demands long term solutions and one which requires cross party support.”
For further information please contact:
Andy Lane / William Muir, The Wriglesworth Consultancy
Tel: 0207 427 1400
Notes to Editors
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 41 banks, building societies and specialist lenders include 16 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (89.4% of balances and 90.6% of gross lending).