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


Five years on

On today’s fifth anniversary of record low interest rates all the talk is about how savers have lost out to borrowers. It should also be about renters and owners.

On 5 March, 2009 the Bank of England cut its main interest rate to 0.5 per cent, the lowest in history, and began its associated policy of quantitative easing in a successful attempt to prevent economic collapse.

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


Double shift

Figures published today underline yet again the historic change in the way we are housed in England.

Headline results from the English Housing Survey for 2012-13 confirm not just one but two remarkable trends: there are now more private tenants than social tenants; and there are about to be more outright owners than people buying with a mortgage.

For more on this plus graphs read my post on Inside Edge, my blog for Inside Housing


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