The good news is that UK housing should be high on the electioneering agenda over the coming weeks
Bob Hunt is chief executive of Paradigm Mortgage Services
Somewhat unbelievably, campaigning for May’s General Election hasn’t ‘officially’ started yet and won’t do so until Parliament is dissolved.
Given the level of to-ing and fro-ing, the constant stream of photo opportunities, the policy announcements, the bickering over TV debates, and the scrutiny of party candidates in key constituencies that has already happened pre-Campaign, I’m afraid to say it’s likely that ‘we ain’t seen nothing yet’. It makes the thought of what is to come over the next eight weeks or so utterly mind-boggling.
Of course part of the reason why this pre-Election period seems more intense than usual is because the result is completely unknowable. 2015 is certainly not an Election which can be described as a foregone conclusion and to consider the full number of complexities, possibilities and outcomes probably requires a degree in politics and statistics, as well as a thick skin if you are to go down the prediction route.
The fact is no-one is able to say with any confidence who will be the next Prime Minister or what party (or parties) will be forming the next Government.
For those who are interested in politics this is a landmark campaign and Election, for those that are not you might want to turn off all media for the next couple of months, possibly the rest of the year if (as some are predicting) this could be the year of two General Elections.
If that thought makes you shudder somewhat, then that’s a completely natural reaction – particularly for us working within the housing and mortgage markets.
Anecdotally we are already hearing that the uncertainty of the Election result is having an impact on people’s purchasing decisions as they hold off until they know the hue of the next Government.
It’s not just residential borrowers who are potentially putting off their purchases either – recent research from Urban.co.uk amongst the UK’s landlord population suggested that 40% have no plans to grow portfolios before the Election, with 26% saying they were concerned about property prices, and 20% worried about legislation changes and increased sector regulations.
Given the Labour Party’s recent policy focus on the private rental sector and calls for rent controls, landlord licensing and potentially tax incentives being taking away, then this reticence is perhaps understandable.
What it clearly shows however is that the UK housing market is likely to be a key battleground during the Election campaign – indeed you would be hard-pressed to find a recent Election where housing figured so prominently.
This is perhaps no bad thing especially if the parties are able to develop a coherent strategy, for example, building on the good work achieved by the Help to Buy scheme and pushing this further in terms of generating far greater numbers of new homes which are much needed right across the country.
However, the cynic in me thinks that instead we will see the usual cat-calling and bickering over which party built the least homes in power and which party can’t be trusted to hit further housing supply targets. Let’s hope not because it should be clear to all politicians – and certainly those within the industry – that increasing our housing stock further, supporting developers, encouraging lenders, offering confidence to purchasers (especially those with small deposits), whilst at the same time recognising how crucial the PRS is in bridging the ‘housing gap’, are all vitally important component parts of an all-encompassing and successful UK housing strategy.
To that end, it has been a very positive move from IMLA and its members to call on political parties to set out their vision for the future of the Help to Buy scheme, particularly the mortgage guarantee element which is due to finish at the end of 2016.
HTB1 is set to continue until the end of the decade however the success of both parts of the scheme means that HTB2 requires some sort of permanent replacement in order to continue to support first-time buyers and those who need high LTV mortgages.
I tend to agree with IMLA that a move to a private insurance scheme will be beneficial to the entire market in that it will keep the opportunities there, allow lenders to keep offering these products, and continue supporting the borrowers and the developers who are building the stock. Not forgetting the fact that it takes away the burden from taxpayers and puts it back on the private sector. Let’s hope we can get some clarity on this in the weeks ahead.
So, the good news is that UK housing should be high on the electioneering agenda over the coming weeks; the bad news is that no-one knows what the quality of the debate will be like or the pertinence of the policies put forward.
What we should all hope for however is that at the end of the campaign and the Election itself we have clarity in the outcome – further uncertainty will be damaging and, given the nature of the marketplace, we could well do without further bumps in the road.
