10 things about 2015: part 1

Originally posted on December 30 on Inside Edge 2, my blog for Inside Housing

Has there ever been a year quite like it for housing? Here’s the first part of my look back at the issues I’ve been blogging about in 2015. 

1) Be careful what you wish for

It was the year that Homes for Britain became Home Ownership for Britain as political campaigning turned into political salvaging. Housing professionals may made their case from Land’s End to London, filled the Albert Hall and secured wide ranging support for its case for more homes. But the election result changed all that – and many of them had booed the representative of the party that won.

True, housing and the need for new homes moved up the political agenda as the year went on but not quite in the way campaigners had imagined. As the election neared the Tories promised a ‘housing revolution’. What amounted to Plan C, the third revolution in five years, took a poor record on supply, and traded it in for what amounted to homes for votes on a grand scale. The campaigners who had filled the Albert Hall found themselves facing the extension of the Right to Buy to housing association tenants.

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Keep your friends close – Part 2

Originally posted on November 30 on Inside Edge 2, my blog for Inside Housing

Part 1 of this blog looked at the apparent winners and the big losers from George Osborne’s announcements last week. But there is one more group lurking on the edges of the playground, ostracised by virtually everyone. What happened to George’s well-heeled former chums should be a warning to everyone else.

Buy-to-let landlords and second home owners thought they had worked hard, done the right thing, bought a house and then another (and another). Contrary to what everyone said about them driving up house prices and destroying local communities, they thought they were providing desperately needed homes and helping pay for local services. They thought the Conservatives were on their side after they blocked a Labour tax rise on second homes in 2010 and kept buy to let out of European mortgage regulation in 2013.

They thought George was ‘one of us’. After all, he made £450,000 profit on his taxpayer-funded second home and rents out his main home for £10,000 a month while he lives in Downing Street. And they voted Conservative in May when those horrible Labour oiks planned rent regulation and a mansion tax.

Their thanks for all this? Sand kicked in their faces with cuts in tax relief in July and the Chinese Burn of hikes in stamp duty and capital gains tax in November. The fate of these entrepreneurs and investors turned enemies of aspiration should be a warning for all those who are currently part of the Osborne in-crowd.

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Death of the Ideal Home

Was this the week when the dream of home ownership in Britain was finally killed off by the greed of buy to let?

All this week the Daily Mail is telling its readers ‘How to Join the Buy to Let Boom’ and offering them a chance to ‘secure your family’s future’ by winning a ‘£260k buy to let house’. Here’s the top half of Monday’s front page (courtesy of @DawnHFoster):

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Winners and losers

So buy to let landlords made £177 billion from rising house prices over the last five years – and that does not include rental income.

A series of linked stories in the Financial Times this morning make clear who the beneficiaries of booming property market have been since 2009, when interest rates fell to a record low. In addition to buy to letters, they are home owners in London (prices up by £563 billion in the last five years) and in Conservative constituencies outside the capital (prices up eight times fasterthan in Labour seats). Even social landlords get in on the act, with a 20 per cent increase in the value of their stock since 2009.

Yet all the research by Savills and impressive FT data visualisation beg some far bigger questions about what it calls the politics of British housing. Why has this happened? If those are the winners, who are the losers?

-> Read the rest of this post on Inside Edge 2, my blog for Inside Housing


Passing the buck

George Osborne has spent so long outsourcing responsibility for the housing market to Mark Carney that it’s easy to forget the Bank of England’s actual brief.

Far from controlling house prices, or tackling affordability or making the market less dysfunctional, the Bank’s Financial Policy Committee (FPC) ‘is charged with a primary objective of identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system’ and a secondary objective ‘to support the economic policy of the government’.

So the measures the FPC announced today on high loan to income (LTI) mortgages and a slightly strengthened stress test on lending are about preventing future house prices from increasing household debt to a level that poses risks to the financial system rather than tackling current price levels and affordability.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Eric’s ladder

The boast from ministers is that Help to Buy really is getting Britain building – but is it enough?

The narrative according to Eric Pickles is that the coalition ‘inherited a situation where builders couldn’t build, buyers couldn’t buy and lenders wouldn’t lend’. Now, thanks to Help to Buy and the reinvigorated Right to Buy, ‘we’re ensuring that anyone who works hard and wants to get on the property ladder will be able to do so’.

Not to be outdone, housing minister Kris Hopkins said the housebuilding figures for the March quarter of 2014 were the result of a ‘massive government effort’ and even took credit for a 23-year high in council house building. And the DCLG press release comes complete with a statement from Stewart Baseley of the Home Builders Federation that the extension of Help to Buy 1 ‘is allowing the industry to plan ahead, rebuild capacity lost in the downturn and deliver the homes the country needs’.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


New regime

Will the new mortgage rules tilt the playing field even further in favour or the housing haves and against the have-nots?

On the face of it’s hard to argue with the idea that lenders should check whether borrowers can actually afford their mortgage before they make the loan. But is it quite that simple?

After a long consultation, the new Mortgage Market Review (MMR) regime finally came into force on Saturday. The aim is to prevent a repeat of the irresponsible surge in lending seen before 2007. The lax rules then were symbolised by the self-certified mortgage, or liar loan, which is now banned.

Read the rest of this post on Inside Edge, my blog for Inside Housing


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