If only it were that simple – the reality is that, if we are to believe the polls and the media, then we could be weeks away from knowing the make-up of the next Government. There are no concrete answers to be given at present which makes writing anything about the political future of the housing and the mortgage market incredibly difficult.
Even when we have some very specific policies on the table, for example, from the Labour Party in terms of the private rental sector, it remains to be seen whether these will actually make it onto the statute book. We have heard lots about ‘red line’ policies, particularly from potential ‘king-maker’ parties in waiting, but again during any sort of Coalition discussions they may be jettisoned in terms of securing agreement. Let’s be honest, in the lead-up to this Election the main protagonists have found it difficult to agree on anything so what might make up an aspiring Government’s Queen Speech is (currently) in the lap of the Gods.
In terms of what we would like to see happen for the good of the UK housing and mortgage market however, I suspect many stakeholders will have a number of ‘red lines’ of their own. This is not a ‘we support one political party over another’ exercise but instead is an opinion on what would be most beneficial to our marketplace and the measures which could really support our sector, not just over the next five-year term but long into the future.
Firstly, is of course the big elephant in the room, housing supply. Everyone knows that supply is far too low at its current levels and all the parties are attempting to convince the electorate how they can boost them. The general consensus figure bandied about is that we need at least 250,000 new homes built every year in order to provide some sort of stability, however with the major house builders coming out recently and saying the building sector would be unable to achieve this, then we could be scuppered before we begin.
This is a sobering point and one that should be taken on board. Supply levels have been low for some time, we have all known this and yet the difficulty has been in, even with measures like HTB1, getting anywhere close to that quarter of a million mark. What can a future Government do to provide a much needed boost in this area? After all we have had a number of policies designed to do just that in the past five years – planning relaxation, freeing up of land banks, Help to Buy, etc – and still we are nowhere near. It seems that building levels are likely to stay at the same sorts of levels for the near future regardless of the political will.
The Election has also focused on two other demographics, although most people within them are one and the same – prospective first-time buyers and private rental tenants. On one hand we have politicians setting out a future in which first-timers will apparently find it easier to get on the housing ladder but with this comes an attempt to curb the so-called ‘excesses' of the lettings market which means more regulation on rent controls, letting agent fees and tenancy agreements.
Part of me wonders if much has this has really been thought through because, quite frankly, the difficulties associated with becoming a first-time buyer – deposit level, affordability, supply of properties – is not going to go away and where else but the private rental sector do these people turn to when it’s perhaps not possible to own a property? What will landlords do if they feel their ability to carve out a sustainable return is under threat?
The ongoing issue for first-time buyers that still needs addressing however is that of saving for a deposit – recently addressed in part by the Help to Buy ISA – and the availability of high LTV mortgages in order to help those credit-worthy borrowers get on the ladder. Help to Buy 2 has boosted this and helped develop much-needed supply in the high LTV mortgage sector however, as we keep repeating, this is a temporary scheme due to end in close to 18 months. What comes after this?
Any future Government has to put in place a permanent, private insurance-backed replacement for HTB2 if it wants to ensure a steady supply of low-deposit mortgages which first-time buyers can access to purchase their homes. Without such a scheme we could see a significant drop in the very mortgages first-timers need the most and therefore any Government plans to see more new owners will be scuppered before it gets going.
All in all, the next few days and weeks represent a pivotal moment for our industry and it’s certainly the case that continued uncertainty will not be good for the market or stakeholders. Perhaps the one thing we should all hope for most is a quick resolution to any post-Election fallout which provides a clear opportunity for a stable Government to be formed and to begin its work sooner rather than later.
