Housing policies were blasted by a succession of speakers at a buy-to-let event in Westminster yesterday.
Flagship schemes such as Funding for Lending, NewBuy and FirstBuy all came under fire.
John Heron, managing director of specialist lender Paragon Mortgages, said: “Politicians are tinkering around at the edges and seeking headlines.
“They are being schizophrenic. On the one hand, they are doing everything they can to drive lenders away from high-risk lending, On the other hand, they are coming up with initiatives encouraging 95% mortgages on new-builds to first-time buyers.”
At the inaugural Great Buy to Let Debate, organised by the Wriglesworth consultancy, both he and other speakers called for a root and branch review of all government policies.
Richard Lambert, chief executive of the National Landlords Association, said that such a review should go beyond politics and form a “much bigger national debate” as to what we want of housing over the next 20 years.
Lambert said that we were at the start of what looked like a major movement in the way Britain houses itself. He said it was not inconceivable that 40% of the population would never be able to afford to enter home ownership from their own resources.
Some speakers suggested that people were turning to private renting because they preferred the flexibility of the lifestyle. But Professor Michael Ball poured scorn on this idea.
He said it was “basic economics” that people would want to buy their own houses if they could, to take advantage of rising equity. One reason why people hadn’t been so keen to buy in the last five years was because they could see that house prices were going down.
Elsewhere in the debate, speakers acknowledged that buy-to-let mortgage rates are much higher than for residential mortgages, despite a lower risk.
Heron said that the risk was “demonstrably lower’ than for the rest of the market, but said that buy-to-let cases were a commercial proposition, requiring “a costly and extensive underwriting process”.
Comments
The gov's policies are far from schizophrenic, both Labour before them and the Coalition are determined at all costs to maintain high nominal house prices (i'm looking at you 0.5% BR since 2008, Support for Mortgage Interest, leaning on the FSA to encourage lender forebearance).
On the other, they're happy to ensure minimal housebuilding activity (of course enough to make a profit for the land-bankers and developers). When FTBs can't afford the new builds they'll chuck a few incentives their way (FTB summit, 'innovative lending solutions', 95% LTV schemes but only for new-builds).
The BTL crowd can stop bleating as well. On top of increased rental activity the gov's Funding for Lending Scheme (FLS) has actually resulted in a lesser number and more expensive mortgage products for FTBs and the reverse being true with existing homeowners with sufficient equity. All this does (as has been reported on here) is ensure homeownership is concentrated into fewer and fewer hands and a increasingly rented populace.
In short, they can f*ck off.
IF tax is used to redistribute wealth and I use a massive "IF" there, then its fair to say that landlords can expect some kind of tax on their properties to redistribute their wealth.
One of this sites many economy masters can tell me what the knock on effect would be...sales of rental property...lower house prices? I dont know I just turn it off and on again!