Perhaps being a surveyor will help Mark Prisk in his new job as housing minister. Following his move from the Department of Business, Innovation and Skills as part of David Cameron’s cabinet reshuffle he will now be expected to help revitalise Britain’s flagging housing industry.
According to his website his parliamentary interests include “small business and enterprise, urban planning and regeneration” so his new job should certainly suit him.
But governments don’t build homes, so something will have to be done to enable builders to start more developments. Last year saw the lowest number of new homes built since 1923, so Mark will definitely have his work cut out.
Difficulties in getting mortgage funding still a problem
Much of the problem lies with the shortage of finance. Despite initiatives intended to encourage first-time buyers, the continuing difficulties in getting mortgage funding mean that many would-be homeowners still cannot afford to buy. And without the prospect of a market for their product, developers are finding it difficult to raise finance to start new projects.
So a new extension of the Government’s FirstBuy scheme announced today should encourage more growth in the market. This will offer aspiring homeowners an equity loan of up to 20% of the property value to be used as a deposit, with the balance being raised on a mortgage.
Removal of tight planning restrictions should help
One of the much-heralded moves of the government to encourage development is the removal of tight planning restrictions which are perceived as preventing new housing. Today the Prime Minister and Deputy Prime Minister will unveil a planning law shake-up in which fewer home and business extensions will require planning permission. They say: “This Government means business in delivering plans to help people, build new homes and kick-start the economy. We're determined to cut through the bureaucracy that holds us back. ”
There have also been calls to allow more new development on the green-belt land which surrounds major cities and conurbations. Major new housing construction on green-belt land is proposed across the country – for instance up to 12, 350 dwellings are planned near Cambridge and 4, 500 new homes outside Bath. In his capacity as MP for Hertford and Stortford Mark Prisk actively campaigned against plans for the development of green belt land north of Harlow, so it will be interesting to see what line he takes on calls for the relaxation of restrictions on such land.
Will the government do anything to help the whole housing market?
It is all very well encouraging new home building and buying, but the government should also be considering what help it can give to the housing market as a whole. There is a lack of buyers for existing homes, so unless today’s first-time buyers can sell on and move up when they want to, the market will not improve.
Probably no-one wants to return to the mad times of a few years ago, when lenders seemed to dish out mortgages to all and sundry, but the current mortgage market seems to have gone into reverse. So any move by the government to encourage an easing of mortgage lending would be welcome.