MPs give their end of term report on housing and the credit crunch today and it does not give much encouragement to hopes that things are going to get much better any time soon.
The Communities and Local Government (CLG) committee heard evidence
from across the housing spectrum in an update of its report earlier this year. On three crucial areas, the government gets marks for effort but results are a different matter:
New homes. The MPs say: ‘There seems to be a general acceptance that the government has done a lot to try to arrest and ameliorate the fall-off in housebuilding, but the availability of public funding is simply not enough to overcome the impact of the credit crunch on the industry.’
Mortgage finance. Crucial to achieving the CLG’s housing goals even though it’s the Treasury’s responsibility. But the MPs say the asset-backed securities guarantee market, which was meant to kickstart the home loans market, ‘is not working’.
Tenure. The credit crunch exposed the fact that home ownership is not appropriate for ‘a significant proportion of the population who need homes’. The MPs say there is ‘no immutable law that owner-occupation should increase’ and that ‘insufficient attention’ has been given to the rented sectors.
The MPs recommend further steps to shore up capacity in the housebuilding industry and ’ to enable housebuilders to sell the homes they build and to allow housing need to be expressed as economic demand’.
They say CLG ministers and officials ‘must continue to work closely with the Treasury and keep up the pressure to ensure that mortgage funding flows more easily and to more mortgage providers’.
And the government must ‘debate and decide on its medium- to long-term policy with regard to the balance of tenure’.
Almost two years since the credit crisis began, the report is a sobering reminder that, despite the green shoots in parts of the housing market, housing as a whole is effectively still crunched.
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