Barwell (pictured) will also act as minister for London.
His responsibilities will include housing, planning policy, neighbourhood planning, lead minister on the housing bill and planning casework, all from within the Department for Communities and Local Government.
This week our panel of experts discuss the strategic direction they want to see the housing minister take, suggesting where his priorities should lie in the coming weeks and months.
Richard Donnell, director of research at Hometrack, discusses Help to Buy, shared ownership and Starter Homes.
Fionnuala Earley, residential research director, Hamptons International, says Barwell should take advantage of the low interest rate environment and borrow cheaply to invest in housing infrastructure.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), wants to see support for high loan-to-value lending and a balanced attitude toward the different tenure-types in the market.
Richard Donnell, director of research at Hometrack
The new housing minister Gavin Barwell is the fifth housing minister in less than four years.
Top of his in-tray will be ensuring continued delivery of more homes. This will be a challenge in the near term as the house building sector faces new headwinds on the back of the Brexit vote. The true economic impact is not going to become clear for some time but sales volumes are set to weaken. If the downturn in sales is prolonged there could be calls for the London version of the Help to Buy scheme, with its 40% equity loan, to be rolled out to the regions to support sales. More likely is additional money for shared ownership which reaches households right down the income ladder at a lower direct cost to the taxpayer than Help to Buy.
Ahead of the EU referendum house builders were holding off major investment decisions over uncertainty on how the Starter Homes policy would be implemented. Getting a Starter Home policy that can really work for builders and lenders will also be important for the new minister.
Finally, expect continued support for Build to Rent but don’t expect a reversal of the recent Stamp Duty and tax changes aimed at private investors. With so much housing related policy emanating from the Treasury under George Osborne’s stewardship it will be interesting to see if the new Chancellor remains as interested in what housing can do for the health of the economy.
Fionnuala Earley, residential research director, Hamptons International
The new housing minister, Gavin Barwell, has a lot on his plate. Not only is he coming to the job at a time when housing is as high up on the political agenda as it’s ever been, he’s also faced with an economy in shock following the vote to leave the EU.
Despite the fall in sterling, which is already pushing up inflation because of higher import costs, the Bank of England is preparing to cut interest rates – the first change in over seven years. Its intention is to stimulate the economy and to prevent a significant hit to consumers’ spending power.
Mr Barwell could do the same. With interest rates – and hence government borrowing rates – as low as they are going to get, he has a huge opportunity to borrow cheaply to invest in housing infrastructure. By taking the bull by the horns and embarking on a multi-tenure house building programme he could really leave his mark – solving the housing crisis and supporting the economy at the same time.
Various schemes and subsidies to stimulate housing delivery have disappointed, meaning affordability for home owners and tenants has deteriorated. By taking charge and actually delivering homes, not only could the minister increase much needed supply, he would take pressure off affordability and support a healthier more liquid market. In addition, promoting construction helps support employment and provides the conduit to train much needed building apprentices for the future. Go on Gavin – give it a go.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA)
While it would have been good to see the government approach the role of housing minister with one eye on continuity given we have now had five since 2010, Gavin Barwell is a competent politician who can rise to the challenges this market faces.
Barwell must strive to improve things for first-time buyers as well as older home owners. IMLA’s analysis shows an estimated 2.2 million first-time buyers went ‘missing’ from the housing market between 2007 and 2015 – which is not good enough. Part of addressing aspiring homeowners’ woes must be to champion greater innovation in the mortgage market.
One avenue he should explore is more support for high loan-to-value lending, which offers a route to ownership in an environment where deposits are hard to raise and prices are out of sync with incomes. Exploring options to extend the Help to Buy mortgage guarantee scheme – due to be cut this December – would be a step in the right direction, the market needs continuity and stability.
It’s also imperative that the new housing minister does not favour one tenure-type over another. Buy to let has become a scapegoat for many of the market’s ills, but in reality it plays a hugely important role in the housing landscape. Landlords perform vital work in providing high quality rental accommodation to the growing number of tenants who need it. Raising landlords’ costs only increases rental prices, making it harder to save for a deposit – which is an enemy to popular homeownership. He might start to think more clearly about the transition from renting to owning and how that can be bridged – the current boost to shared ownership is part of that.
At the root of many of the problems Barwell faces is the fact that successive governments have failed to build enough homes. Barwell must unite policymakers, local government and industry behind a clear vision in order to change this and to give all the players the confidence to build for the future.
