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IMLA calls for government-industry cooperation to aid market growth

  • 17/01/2022
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IMLA calls for government-industry cooperation to aid market growth
The Intermediary Mortgage Lenders Association (IMLA) has called for greater cooperation between the mortgage industry and the government in its 2022 Mortgage Market Manifesto.

Detailing a list of priorities for the year, IMLA said that such cooperation was needed to keep the sector buoyant and to ensure that a healthy housing market remained accessible to buyers as well as renters. The group called for a focus on affordability for first-time buyers, ways to incentivise the green agenda, clarifying responsibility on cladding questions and resisting certain changes in the buy-to-let (BTL) rules.

Kate Davies (pictured), executive director of IMLA, said: “Our housing market needs a long-term vision, and one which is coordinated across government and the wider industry. And it is paramount that this vision is underpinned by a strategy to address the pressing issues we are facing.”

For example, she added, “we don’t just need more homes – we need more homes of the right design, which are energy efficient and serviced by appropriate infrastructure such as roads, schools and hospitals.”

Davies said that “despite – and in some cases as a result of – the continuing Covid-19 pandemic, 2021 remained a very busy year for the housing market. Amid this ongoing demand, there are still plenty of areas we need to focus on to support the market, and ensure it is accessible to borrowers across the country from a range of backgrounds.”

One challenge IMLA mentioned was how to balance the need for affordable housing for first-time-buyers against the needs of the private rental sector, which saw landlords using the stamp duty holiday to snap up buy-to-let properties last year.

On the question of supply and affordability, IMLA said prices were being kept high as demand continued to outpace supply. 

Phase One of the First Homes scheme announced in May was about to go live, but IMLA said the project was still relatively small-scale and would succeed if developers had the appetite to get involved and self-fund the initiative. IMLA also said it was concerned about a requirement for first-time buyers who eventually sell to do so at a 30 per cent discount.


Affordability barriers and green initatives

The organisation said it welcomed news that the Bank of England was to consult on removing the Financial Policy Committee’s additional stress test of three per cent above standard variable rate (SVR). IMLA said that while it was important to ensure that borrowers weren’t getting in too deep, the current yardstick for affordability was often unrealistic, blocking many first-time buyers from getting on, or climbing up, the property ladder.

IMLA also applauded lenders who served loan applicants who did not fit traditional “mainstream” criteria, saying that while it may mean these customers won’t be eligible for the lowest rates advertised, they may still be able to secure a mortgage.  

With climate change on the minds of many would-be buyers and renters, IMLA said it agreed that the market needed to do its part to reach net-zero carbon emissions by 2050. But it cautioned that a piecemeal policy for obliging property owners to carry out improvements would lead to confusion and what it called “unintended consequences”. It called for a re-examination of EPCs to ensure they remained fit for purpose.

 IMLA’s manifesto also argued against additional changes in capital gains tax rates, saying that they could deter investments by landlords in – and encourage others to opt out of – the now-vibrant BTL market, and as a result, lead to higher costs for renters.   

The group also called on the government to find a solution to paying for the removal and replacement of flammable cladding.

It estimated the costs of remediation work on existing structures to be between £15bn and £50bn, and said the government had only offered £5bn so far. IMLA called for legislation that clearly identified who was responsible for defective construction and how to pay for ongoing maintenance to protect leaseholders.



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