IMLA manifesto targets housing supply, affordability and BTL

IMLA manifesto targets housing supply, affordability and BTL
(Photo by PAUL ELLIS/AFP via Getty Images)

The Intermediary Mortgage Lending Association has published its 2022 Mortgage Market Manifesto, pledging to put renewed pressure on the government to fix the ongoing imbalance of housing supply and demand, among other things.

The trade body’s executive director, Kate Davies, said today (January 17) the UK housing market needed “a long-term vision” in which the government is better aligned with the wider industry.

“It is paramount that this vision is underpinned by a strategy to address the pressing issues we are facing,” she said.

“For example, we don’t just need more homes – we need more homes of the right design, which are energy efficient and serviced by appropriate infrastructure such as roads, schools and hospitals.”

IMLA said the government’s First Homes scheme, announced back in May 2021 to tackle the housing supply shortage, was “still relatively small-scale” with pilot projects about to go live.

“Its success will ultimately depend on the appetite of developers to get involved and self-fund the initiative,” the trade body said.

“We have expressed some concerns about how borrowers using the scheme to buy their first property would be able to trade up in the future, given the requirement to sell at a 30 per cent discount.”

Helping non-standard customers

In the interest of more people owning a house across the UK, IMLA said it “welcome[d]” the news last month that the Bank of England was planning to consult on removing the 3 per cent stress test, which it argued had “prevented numerous prospective borrowers, including many first-time buyers, from stepping onto or up the housing ladder”.

The Financial Conduct Authority already requires mortgage lenders to assume interest rates will rise by a minimum of 1 per cent over the first five years of a new mortgage in their affordability tests.

The IMLA said this was enough of a test on affordability, despite much industry debate on the topic.

In tandem, the trade body said the “overriding message” held by the sector was ‘you may not be eligible for the lowest rates advertised, but that does not mean that you will not be able to get a mortgage’, based on surveys conducted with consumers and members last year.

“We will continue to emphasise this message and work with our intermediary colleagues to reach as many aspiring homeowners as possible,” it said.

“We believe that many consumers would be able to find a mortgage to suit them if they were to approach an expert mortgage intermediary to advise them on what is available in the market.”

‘Unwelcome measures’ risk BTL exodus

Following the increased numbers of landlords buying buy-to-let property during the stamp duty holiday last year, the IMLA is also concerned for the future of landlords.