Mortgage brokers are wary about the controls that could be used by the Government to try to bring about housing market stability.
Earlier this week, housing minister Grant Shapps told The Observer he wants a period of “house price stability”, where prices rise below the rate of earnings to make property more affordable, especially for young people.
In a separate interview this week on BBC Radio 4’s Today programme, Shapps said it is “foolish” for the Government to think it can end boom and bust but said it does have certain “levers” to influence the market. He said: “I think it would be desirable to have a stable housing market and there are things the Government can do. There are policy levers.” He also wants people to look at other types of investment to provide funding in retirement rather than rely on the housing market.
John Charcol senior technical manager Ray Boulger says: “I think if the Government tries to get directly involved in influencing house prices, it would have to be careful. The Government has got a very bad track record of getting involved in things dictated by market forces. I think it is perfectly reasonable for the Government to introduce policies which are designed to influence the housing market in the way it should be influenced but I do not think it should implement direct controls. There is a big difference.”
London & Country head of communications David Hollingworth says: “I would probably welcome the overriding principle of more stable house price inflation rather than ups and downs. That is something that everybody would be looking for but, as always, you have to look at the detail of how the Government would achieve that and what these levers might be.”