Speaking at the CML’s Future Housing Conference, Michael Vennard, government and industry liaison from Lloyds Banking Group suggested that lenders should mitigate risks through partnerships, however his point was attacked by John Stewart, director of economic affairs at the HBF.
Stewart said: “I don’t mean to be rude but lenders are in the business of lending and that’s a risky business. Developers need to build houses and that’s an even riskier business. For lenders to be looking for ways to mitigate risk, I find that very unsatisfactory.
“It’s particularly unsatisfactory because we have an industry that deals with risk. It is called the insurance industry, which has a product called the mortgage indemnity insurance (MIG) to combat risk.
“The industry needs a MIG as unless it works, we won’t be able to get developers into building homes.”
But in a previous session, Vennard said MIGs still needed further development.
He said: “MIGs are one of the potential growth areas. There’s some work to be done to the MIG insurance in terms of tightening up the clauses and sorting out the underwriting. It’s hardly innovation it’s just tweaking what we’re already used to.”
