News Review
Government housing strategy flops with industry By Sarah Davidson
The government’s housing strategy aiming to “unblock the housing market” has left mortgage industry pundits underwhelmed. Nigel Stockton, financial
services director at Coun- trywide, said: “Whilst the measures announced in the government’s housing strat- egy are a step in the right di- rection, they only scratch the surface on the fundamental issues that have restricted the housing market in recent years– housing supply and the high level of deposits re- quired.” Dean Mason, principal at
Mason’s Financial Planning, said the government-backed Mortgage Indemnity Guar- antee scheme was well inten- tioned but poorly researched and would have a limited im- pact on the market. He said: “Bone fide 95%
mortgages are available and the only way I can see the
scheme working is if lenders relax their criteria, reduce rates at this level and that the public at large buy into the benefit of funding first-time buyers. “My view is that this combi-
nation of factors is unlikely to come together, but we can live in hope.” PMS managing director,
John Cupis, said the scheme was welcome but lacked criti- cal detail. “The scheme still lacks
important detail in key areas, such as how much funding will actually be forthcoming and the qualifying criteria,” he said. “This makes it difficult to
gauge the long-term impact on the industry and consum- ers. The scheme also does nothing for second time buy- ers.” Meanwhile David Hol-
lingworth, associate director of communications at Bath- based London & Country, ar-
Government Housing Strategy Highlights
• The MIG scheme on new- build will see government provide lenders with security up to 5.5% of each property’s value and builders put 3.5% of each property’s value into an indem- nity fund. Borrowers will provide a 5% deposit. • There will be a cap on the value of properties eligible for inclusion in the scheme, to be announced, and lenders will be able to decide on a commercial basis who they lend to under the scheme.
gued the scope of the scheme was too narrow. He added: “It would be de-
sirable for the incentives to apply to property other than new build but the developer is backing the indemnity and it also focuses on the need for more new homes to address a growing supply issue.”
• The government says it hopes 100,000 borrowers will be helped. • Social tenants will be able to buy their homes at a 50% discount. • Receipts will be reinvested into building new affordable homes. • £400m has been set aside to help restart stalled construc- tion projects that demonstrate a commitment to affordable homes. • In total the government has committed £400m to housing is a tenth of the £4bn cut from government funded housing investment by George Osborne last year.
Stockton said its success
was dependant on the gov- ernment ensuring it delivered on its promise to increase the number of new starts. The latest Homes and
Communities Agency statis- tics showed there were only 1,746 housing starts in the six months from April.
Mortgage Introducer editor scoops top award
Mortgage Introducer editor Sarah Davidson scooped a top industry accolade last month when she won the award for best trade article at the Santander Personal Finance Media Awards. The Santander Media
Awards, now in their 25th year, are widely considered to be the most prestigious in personal finance calendar. A panel of 20 independent
judges considered more than 600 entries from across the mortgage, pensions, in- surance and investment sec-
tors and judged Davidson the winner. Davidson, who joined
MI in May 2010, won the award for her piece on the second Mortgage Market Review paper titled “First among equals” where she argued the Financial Servic- es Authority risked consum- er freedoms with its propos- als. Santander said the
achievement was particular- ly impressive given that Da- vidson was a newcomer to the trade press.
4 MorTGAGe INTroDuCer DECEMBER 2011 August 2010 £5.00
MORTGAGE INTRODUCER
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FC_0810.indd 1 DON’T UNDERVALUE YOUR ADVICE THE INTERVIEW: KENSINGTON’S KEITH STREET 27/07/2010 08:54
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