Homes for Scotland responds to ‘hugely significant’ Mansion House speeches
During last week’s Mansion House speeches, the Chancellor outlined action he has taken which he said would address risks that could emerge in the housing market and tackle the UK’s long term housing challenge.
He announced that he is giving further powers to the Bank of England to act if they think it is right to do so – including, for the first time, the power to cap the size of mortgage loans as a share of a borrower’s income or the value of the house. Latest data on new lending shows that loan to value ratios remain well below their peak, but that loan to income ratios are at a new high.
The Chancellor said: “For most people, their home is the biggest investment of their lifetime. And, of course, they want that asset to increase in value over time.
“But a home is also a place to live and build our lives – and we want all families to be able to afford security, comfort and peace of mind. That means homes have to be affordable – whether you’re renting or buying.
“The only way that can be achieved over the long term is by building more, so supply better matches demand.”
Responding to the speeches, chief executive of home building industry body Homes for Scotland, Philip Hogg, said “Following six years of declining housing output in Scotland and shattered industry and consumer confidence, only now are we beginning to see the signs of recovery with the hugely successful Help to Buy (Scotland) shared equity playing a major role in this.
“There is a wide variation in conditions across the UK with no signs of an over-heating market or housing bubble in Scotland. Policy-makers therefore need to carefully consider the impact of any changes.”
Mr Hogg (pictured) added: “The Chancellor also announced important planning reforms removing obstacles to brownfield development south of the border. In Scotland, lack of effective land remains the single biggest blockage to building more of the new homes we desperately need. It is essential that Local Authorities acknowledge this and significantly increase the amount available across a much wider range and variety of sites in order to meet housing need across all tenures.”
Shares in Britain’s big housebuilders plunged following the speeches.
Barratt Developments, Bellway, Bovis, Persimmon and Taylor Wimpey shed between 4.9 per cent and 7 per cent.
On the currency markets, meanwhile, sterling rose close to a five-year high following Mr Carney’s remarks on interest rates.