Housebuilding too is a driver of economic activity – the CBI estimated that 40% of the economic slowdown could be attributable to the housing market.
Building houses to help spur economic activity is, of course, not new but as our population continues to increase, and as the proportion of those owning their houses continues to grow, it appears to be becoming an increasingly divisive issue.
The Government has put forward a range of initiatives aimed at supporting and expanding home building in the UK. We have seen First Buy, NewBuy, Right to Buy and self build initiatives all seeking to promote and encourage home ownership and house building.
The new homes that are being built also need to meet tougher sustainability standards, including substantial increases in energy efficiency.
Similarly this year the government is introducing the green deal that will support improvements to existing properties, changes also being driven by higher fuel energy prices and an increasing interest in environmentally-friendly homes.
More recently the government and the Bank of England announced the Funding for Lending scheme aimed at lending activity for SME and mortgage customers through the provision of cheaper, longer-term funding for banks. Of course the challenge is not just to build houses but to persuade customers to buy those houses, in many cases with mortgages.
The purchase decision is partly about the price and availability of mortgages and the need for the appropriate deposit but it is also aligned to buyer confidence. Having too many houses can be even more problematic than having too few (as Spain is finding out).
And all this as insurers and Government continue to discuss flood insurance cover across the UK, particularly given the rising costs and the need for ongoing investment in improved flooding prevention schemes.
We are in the process of both breaking up the FSA and introducing new rules, including from Europe, whilst at the same time proposing changes to make the banking sector less risky going forwards. Government is becoming less centralised and standardised.
We have also been reminded recently how much we take for granted – that regular banking transactions and activities continue uninterrupted and without us needing to worry.
Andrew Baddeley-Chappell is head of specialist lending and divisional policy and governance at Nationwide