Government told to end 'piecemeal' housing policy


John Heron, managing director at Paragon Mortgages, has called for an “end to piecemeal policy development” under the next government and suggested the last government had adopted populist changes “which may solve one problem but then create another”.

He told FTAdviser he would like to see a root and branch review of housing need, the outcome of which would be a framework for housing policy that is “fit for purpose for the next 20 or 30 years and not simply for the term of the next parliament”.

“Within that, we would like to see a recognition of the contribution private landlords make in the provision of housing for those who either don’t want to buy or can’t afford to buy at this point in their lives,” he added. 

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“This is something that’s very much been lacking from recent policy development and if we had a particular request it would be to implement no further changes that would reduce the motivation of landlords to invest further.”

The Conservative government introduced a number of changes to the buy-to-let market, with the implementation of additional stamp duty for buy-to-let properties coming in last year. 

Then from April 2017 the amount of tax relief landlords are able to receive on residential property finance costs was restricted to the basic rate of income tax.

Homebuyer and buy-to-let lending activity has slowed in recent months, held back in part by the tax reforms as well as the snap general election on 8 June. 

But Mr Heron wants the government to suspend these changes and conduct an independent review of their impact on the buy-to-let market as he revealed the tax relief changes had knocked landlords’ confidence.

“In the last few months we’ve seen buy-to-let lending reduce a little. But underneath that in particular we see a marked reduction in lending for buy-to-let purchases rather than remortgages,” he explains.

Mr Heron has seen an increase in interest from portfolio professional landlords, particularly those who structure their holdings in limited companies.

He said: “We’ve already made significant changes to our approach to affordability to make sure the loans we make to landlords remain sustainable once these tax changes are fully implemented.”

Mr Heron confirmed Paragon Mortgages planned to expand the facilities it offered for landlords with larger portfolios, including incorporated landlords.

“We’d also like to bring some products forward that help landlords that are looking to build to rent and also improve the facilities that are available to landlords who are looking to refurbish property.”

Watch the full video interview with Mr Heron at the top of the page.