View more on these topics

Supply line

We need stable house prices while we sort out the supply problem

The comprehensive spen-ding review brought some interesting news for the housing market. Some people are saying all the buy-to-let landlords are going to get really taken to the clean-ers as lots of people are not going to be able to afford to pay rents.

But you have got another band of people who are saying buy-to-let landlords cannot get enough of it because they cannot get mortgages.

There is probably a bit of truth in both but I am not so sure my natural instinct is to say that we need to make buying property for buy-to-let landlords easier than for firsttime buyers.

For years, we have seen firsttime buyers being priced out of the market by buy-to-letters. I would much rather, if there was any help coming from anywhere, that it is targeted towards first-time buyers rather than buy-to-letters. There is absolutely nothing out there that has changed the underlying desire for people to own their own property. Surveys have proved this over the last few years.

What is true is people are only able to get into the market a few years later than when they would like to.

What we really want, and I think housing minister Grant Shapps has made this point and I have made this point as well, is stability in prices while we sort out the supply problems.

What we do not want is a situ-ation where it is too easy to get on the ladder and prices just get bid up. Prices can get pushed up so easily because there is a fundamental shortage of properties.

There is a debate over whether renters are in social housing or in the private rented sector but the fact of who owns it does not change the fundamentals that is a shortage of property.

The CSR announced that 150,000 homes are to be built over four years. But there are already over a million families looking for homes.

Whatever happens, you are not going to easily make up that shortage because there is a fundamental shortage of properties which has only got worse over the last three years. That is why I cannot see property prices going down too much, even taking into account the difficulty getting mortgages.

We are seeing one or two new lenders coming in but it is still a pimple compared with the supply of funding we need to meet demand. But if you have the supply of funding that people are crying out for, you are going to have another artificial boom in housing.

The Government is still keen on people buying their own homes but it cannot suddenly change the demand and supply factor to put it right. It will take many, many years.

Danny Lovey is principal of the Mortgage Practitioner

Recommended

Armstrong aims to hedge against inflation with precious metals and commodities

Armstrong Investment Management is looking at precious metals and commodities as a way to hedge the risk of rising inflation. In the funds it runs for Distinction Asset Management, AIM is holding three exchange traded funds from ETF Securities that provide exposure to physical gold, physical silver and physical platinum respectively. There are also two […]

Flat-rate pension benefits outweigh the problems

Not many more details but a great deal of speculation has emerged since the Government announced plans last week for a £140 a week flat-rate state pension. Debate has focused on what will happen to those who have contracted out and those who have built up entitlements which would have seen them receive far more […]

47

Labour Party calls for rethink on RDR grandfathering

The Labour Party has urged the FSA to offer some kind of grandfathering to experienced advisers concerned about reaching the QCF level 4 requirements by the end of 2012. Speaking at last night’s Parliamentary debate on the RDR, Shadow Treasury minister Christopher Leslie said he understands and agrees with the move to QCF level four […]

Research on dynamics could send a message of hope

The Government is being urged to follow up the review of automatic enrolment with research into the dynamics of the labour market. In an interview with Money Marketing, Legal & General pensions strategy director Adrian Boulding and former EEF head of employment policy David Yeandle, who co-authored the Making Auto-enrolment Work review alongside Institute for […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com