Greater fragmentation of markets and government schemes, stumbling progress towards a coherent housing policy and fresh eurozone problems are three things that the Council of Mortgage Lenders does not want to see this year, but worries that they might.
In its news and views, the CML said it expects the forthcoming general election to be a springboard for a range of initiatives targeted at housing and mortgage markets.
It urged policy makers to bear in mind that what generally works best for lenders is a narrower range of initiatives, applying broadly across the market and constructed in a way that maximises the potential for firms to support them.
The government should seek to implement policy initiatives after the election, the trade body said, adding that lenders want to see a “concerted effort to avoid unnecessary barriers to their ability to participate”.
Meanwhile the CML hopes that there will be no fresh problems in the eurozone and a worsening global economy, noting that the even in the first weeks of the year, there have been fresh concerns about the stability of currency markets and risks of deflation in the eurozone.
“The revival of the UK economy over the past two years has coincided with improved household confidence and stronger employment, which has done much to underpin the recovery in housing market activity.
“The short-term picture for the UK is resilient, but with risks from a deteriorating global economy and, in particular, the eurozone. This has the potential to reduce UK growth and affect consumer confidence, with consequences for housing and mortgage markets.”
The CML also said that while it supports the broad aspirations of all the main parties to increase housing supply, it would also like to see more progress towards the development of a “co-ordinated, concerted approach to housing policy”.
It suggested that to deliver sustainable solutions to the UK’s long-running housing problems, the policy approach needs to extend over a series of parliaments and must be supported by a wider political consensus.
The CML said it hopes that the election can deliver a decisive step towards this kind of approach and away from the “disjointed policy” that has characterised the UK under successive government for much of the last three decades.
“The lending industry is ready to contribute to the development of a long-term policy addressing supply-side constraints and affordability issues. We also need to avoid creating unnecessary barriers to the contribution lenders can make to the private rented sector and to address the long-term shortage of – and funding for – social housing.”
The CML also mentioned five other things to look out for in January, which began with preparing for higher interest rates, how the general election in which housing will be a key issue, planning for the European mortgage directive, a review of the Mortgage Market Review and “other reviews”.
ruth.gillbe@ft.com
