Taken from Mortgage Strategy:
When launching her Conservative Party leadership campaign at the end of June, home secretary Theresa May referred to the UK’s longstanding emphasis on homeownership. She then spoke of the current diffi*culty for many people in both getting on the housing ladder and making mortgage repayments during a period of austerity and steeply rising property prices.
“You may have your own home but you worry about paying the mortgage,” May said. “You can just about manage but you worry about the cost of living and getting your kids into a good school.
“If you’re young, you’ll find it harder than ever before to own your own home.”
Now ensconced for two months as both Tory leader and prime minister, May has helped her new government to settle down and make significant changes already to the mortgage and housing markets.
As it grapples with the mechanics of leaving the EU, it has abandoned former prime minister David Cameron’s target of closing the budget deficit by 2020. The Autumn Statement on 23 November is expected to contain a further package of tax cuts and fiscal stimuli.
Since the Brexit vote, the Treasury and the Bank of England have collaborated to significantly ease capital restrictions on banks in order to boost lending.
BoE governor Mark Carney, meanwhile, led a unanimous decision by the Monetary Policy Committee to cut interest rates to 0.25 per cent and provide billions of pounds more in quantitative easing. He also launched the innovative Term Funding Scheme, offering banks and building societies up to £100bn over the next year at beneficial rates for four years. This is in effect an updated version of Funding for Lending, which closed for mortgages in January 2014.
The Council of Mortgage Lenders says the TFS should help lenders to offset financial pressures resulting from lower interest rates and to pass on the Bank rate cut, which some banks have yet to do.
The range of macro measures will have a significant impact on the mortgage market, with banks free to lend more and many grappling with the effect of rate cuts. However, there remains uncertainty about mortgage schemes such as Help to Buy and the wide range of saving schemes on offer to help borrowers save for their first deposit.
Ministers
MP for Croydon Central Gavin Barwell was made housing minister in July, replacing Brandon Lewis and becoming the fifth such minister since the Conservatives took office in 2010.
Significantly, the position is not a Cabinet-level post as it was under former Labour prime minister Gordon Brown, when Yvette Cooper was housing minister.
Barwell is also minister of state for London, meaning he will divide his time between the two roles. However, his position as housing minister is more senior compared with when an earlier predecessor, Kris Hopkins, was a mere under-secretary of state during David Cameron’s prem*iership in 2013.
Under former Labour leader Ed Miliband, the role of shadow housing minister was beefed up to attend Cabinet when he promoted Emma Reynolds in 2012.
Miliband’s successor, Jeremy Corbyn, prolonged the decision and shadow housing minister John Healey continued to attend Cabinet until he resigned in July. He has not been replaced.
Labour’s current leadership contest between Corbyn and challenger Owen Smith will end on 24 September, with Corbyn widely predicted to emerge victorious. Unless Labour gains a new focus, the ‘personnel politics’ of the housing portfolio will leave many in the sector underwhelmed, with a part-time minister and no opposition.
Priorities
With most housing policy driven by the Treasury, the industry’s attention will centre on the Conservatives’ party conference in Birmingham next month, which is likely to be the occasion for big policy announcements by the chancellor and key Cabinet ministers.
Cicero chief corporate counsel Iain Anderson says: “Housing remains a key priority for the Government and I am expecting to see the Conservatives talk a lot about this at their party conference, and for it to feature in the Autumn Statement at the end of November.”
The key aim for many is to build more homes and end the housing crisis that has gripped the country for a decade.
Building Societies Association head of mortgage policy Paul Broadhead says his members want more housebuilding and government support. He says: “The private sector still isn’t delivering sufficiently and is unlikely to do so any time soon. The increase in affordability issues has started to spill over into the number of homes being built and, if the private sector isn’t delivering, the Government has to step in.
“We will make some suggestions in our Autumn Statement submission but it will be focused on housebuilding.”
When launching her Conservative Party leadership campaign at the end of June, home secretary Theresa May referred to the UK’s longstanding emphasis on homeownership. She then spoke of the current diffi*culty for many people in both getting on the housing ladder and making mortgage repayments during a period of austerity and steeply rising property prices.
“You may have your own home but you worry about paying the mortgage,” May said. “You can just about manage but you worry about the cost of living and getting your kids into a good school.
“If you’re young, you’ll find it harder than ever before to own your own home.”
Now ensconced for two months as both Tory leader and prime minister, May has helped her new government to settle down and make significant changes already to the mortgage and housing markets.
As it grapples with the mechanics of leaving the EU, it has abandoned former prime minister David Cameron’s target of closing the budget deficit by 2020. The Autumn Statement on 23 November is expected to contain a further package of tax cuts and fiscal stimuli.
Since the Brexit vote, the Treasury and the Bank of England have collaborated to significantly ease capital restrictions on banks in order to boost lending.
BoE governor Mark Carney, meanwhile, led a unanimous decision by the Monetary Policy Committee to cut interest rates to 0.25 per cent and provide billions of pounds more in quantitative easing. He also launched the innovative Term Funding Scheme, offering banks and building societies up to £100bn over the next year at beneficial rates for four years. This is in effect an updated version of Funding for Lending, which closed for mortgages in January 2014.
The Council of Mortgage Lenders says the TFS should help lenders to offset financial pressures resulting from lower interest rates and to pass on the Bank rate cut, which some banks have yet to do.
The range of macro measures will have a significant impact on the mortgage market, with banks free to lend more and many grappling with the effect of rate cuts. However, there remains uncertainty about mortgage schemes such as Help to Buy and the wide range of saving schemes on offer to help borrowers save for their first deposit.
Ministers
MP for Croydon Central Gavin Barwell was made housing minister in July, replacing Brandon Lewis and becoming the fifth such minister since the Conservatives took office in 2010.
Significantly, the position is not a Cabinet-level post as it was under former Labour prime minister Gordon Brown, when Yvette Cooper was housing minister.
Barwell is also minister of state for London, meaning he will divide his time between the two roles. However, his position as housing minister is more senior compared with when an earlier predecessor, Kris Hopkins, was a mere under-secretary of state during David Cameron’s prem*iership in 2013.
Under former Labour leader Ed Miliband, the role of shadow housing minister was beefed up to attend Cabinet when he promoted Emma Reynolds in 2012.
Miliband’s successor, Jeremy Corbyn, prolonged the decision and shadow housing minister John Healey continued to attend Cabinet until he resigned in July. He has not been replaced.
Labour’s current leadership contest between Corbyn and challenger Owen Smith will end on 24 September, with Corbyn widely predicted to emerge victorious. Unless Labour gains a new focus, the ‘personnel politics’ of the housing portfolio will leave many in the sector underwhelmed, with a part-time minister and no opposition.
Priorities
With most housing policy driven by the Treasury, the industry’s attention will centre on the Conservatives’ party conference in Birmingham next month, which is likely to be the occasion for big policy announcements by the chancellor and key Cabinet ministers.
Cicero chief corporate counsel Iain Anderson says: “Housing remains a key priority for the Government and I am expecting to see the Conservatives talk a lot about this at their party conference, and for it to feature in the Autumn Statement at the end of November.”
The key aim for many is to build more homes and end the housing crisis that has gripped the country for a decade.
Building Societies Association head of mortgage policy Paul Broadhead says his members want more housebuilding and government support. He says: “The private sector still isn’t delivering sufficiently and is unlikely to do so any time soon. The increase in affordability issues has started to spill over into the number of homes being built and, if the private sector isn’t delivering, the Government has to step in.
“We will make some suggestions in our Autumn Statement submission but it will be focused on housebuilding.”
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