THE Government urgently needs to come up with better policies to help address the growing housing crisis, a leading property association has warned.
Jonathan Rolande, from the National Association of Property Buyers, said: “Property prices are at an almost all-time high and interest rates have climbed to levels not seen for well over a decade. And they show no sign of reducing any time soon. Rents are at the highest level we’ve ever seen too. They have been eating up huge chunks of income, predominantly for the younger generation who look with increasing envy at the parents and grandparents who bought property many years before.
“Property has long been at the forefront of the free market with almost no interference from government other than to prop it up with incentive schemes, such as stamp duty relief, and help to buy two recent examples of policies that have exacerbated the problem.”
Mr Rolande also hit out at the idea that introducing 40 year mortgages can help solve the crisis.
Ministers are apparently keen to promote long-term loans to help unlock the property crisis.
Mr Rolande said: “The idea that we think we can solve the crisis by asking people to pay more for longer just exposes how disjointed this whole debate has become.
“At first glance, 40 year mortgages are a good idea. They reduce monthly outgoings for younger people, just at the time of my life, when they are likely to have the least amount of income and assets. They certainly can be a part of the solution in the right circumstances. But, make no mistake, enabling more people to buy property at a lower cost will inevitably fuel property inflation eventually eliminating the initial benefits. So it’s no silver bullet.
“The reasons for the current state of things goes back decades and includes, amongst many other things; high land value, population growth, immigration, foreign purchasing, a lack of newbuild, the rise of single occupant households, the spread of wealth to London and the Southeast, holiday homeownership, buy to let, the sale of council houses. In fact, the list goes on and on and on.”
Urging the Government to go further, faster, he added: “Right now the stakes could not be higher. “The Government knowing an election is due next year, seem to be belatedly realising just how important housing is to the electorate. They are desperately trying to think of ways to reinvigorate building and property sales. But they need to come up with better ideas than just promoting a 40 year-mortgage.
“Failure to at least begin to address the crisis may well be the undoing of the Conservatives which is an irony for the party that, for so long, championed home ownership.”
