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What has the government ever done for us?

by: Richard Sexton
  • 04/09/2014
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What has the government ever done for us?
Whatever your politics, it's pretty standard form for those in the property and lending industries to criticise the government for lack of support.

Over the course of the last 30 years or so I would have to agree that that is a reasonably fair assessment.

With the exception of the original Right to Buy initiative back in the 80s which to Maggie’s delight encouraged council tenants across the country to become home owners, successive governments have arguably tended to assign a lower priority to the industries.

This is certainly true when compared with high profile areas such as transportation and energy production. Whilst I still can’t readily imagine any estate agency chain or financial services network being nationalised to ‘save the country’, let’s not forget that is exactly what happened to a not unsubstantial portion of the lending sector in 2008 and 2010.

Today, with the benefit of a degree of hindsight, the current government has indeed taken a number of proactive steps which firstly gave the sectors a life support machine before moving on to nurse them back into the general ward.

Firstly, Funding for Lending gave banks and building societies confidence to increase lending volumes. The associated media coverage encouraged those who could probably access finance anyway but did not believe they could, to pick up the phone to their broker.

Help to Buy 1 kick started the new build sector and offered assistance to those who struggled to raise a deposit but who were financially capable of servicing a sensible mortgage.

Help to Buy 2 opened the scheme up to virtually all property and did much to re-awaken the public’s interest in participation in the housing market. There are those that now argue that the market is over stimulated, but rumours of a bubble are ridiculous when by any measure, activity and prices are below or commensurate with where they were seven years ago.

Having asked for and received support, doom-mongers should consider carefully what they wish for next. Any incoming government will no doubt once again have to reassess priorities for funds and baseless suggestions of an overheating market will only serve to encourage the withdrawal of support. These industries are off the critical list but still not discharged from hospital – therefore it simply seems crazy to make calls for the antibiotic drip to be unplugged prematurely.

Richard Sexton is the director of business development at e.surv Chartered Surveyors

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