In a paper entitled UK Election 2015 – criteria for housing and mortgage policy pledges, IMLA set out five issues with the housing market that the government needs to tackle.
According to IMLA successive governments and ministers have launched conflicting often short-term policies over the last 30 years, creating a fragmented housing market.
Peter Williams, executive director of IMLA, said: “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.”
In the document IMLA said the government needs to review regulatory changes to the mortgage market and support high LTV borrowing in the long-term by launching a privately backed mortgage indemnity guarantee (MIG) to succeed Help to Buy.
It added that politicians should address the issue of older households looking to downsize and launch an open discussion on the role of sub-prime.
Lastly it called for a programme dedicated to managing the withdrawal of government measures on the market.
Genworth director Patrick Bamford backed IMLA’s call for a cohesive approach.
He said: “It is welcome to see support on this from IMLA, whose latest paper calls for the introduction of a long-term mortgage guarantee scheme.
“There is a huge amount of scope to develop and improve upon Help to Buy.
“We remain a long way from a ‘normal’ market for first time buyers and greater high LTV lending is also needed to support long-term house building ambitions.
“A permanent successor to Help to Buy would go a long way towards addressing two of the greatest challenges the industry faces: continuing access to homeownership and a sustained increase in housing supply.”
He added: “This should be transferred to the private sector and implemented well ahead of the end of Help to Buy 2 to achieve a smooth transition.
“Private mortgage insurers have the capacity and the willingness to take over from Help to Buy and build on the gains already made.
“This would reduce any risk to the tax payer while maintaining sensible checks to protect the financial system.”
According to IMLA owner occupation is likely to fall from 64% to 59% over the course of the next parliament in the next five years.
Williams added: “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.”
