The Government proposals to help the housing market have been largely welcomed although most people believe more could be done. And the Government was criticised for failing to address the liquidity issue by helping the mortgage funding markets.
The Council of Mortgage Lenders director general Michael Coogan summed it up by saying: "Essentially this package is directed at the blockages in the housing market for some vulnerable consumers. This is welcome, but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets.”
Peter Williams, executive director of the Intermediary Mortgage Lenders Association, said: "These measures will help certain individuals and have a positive impact on confidence but in no sense are they market transforming. They do nothing to tackle the fundamental issue in the market - the lack of availability of wholesale funding which is creating the logjam in the mortgage market."
Williams speaks for many in the industry when he called for the early delivery of Sir James Crosby's final report: “We hope it ushers in urgent action to free up additional funding for lending institutions generally, including specialist lenders. The Bank of England's special liquidity scheme is restricted to existing loans and we need measures to help improve the availability of new loans to consumers, which will feed through into the wider mortgage market."
Stephen Smith, director of housing at Legal & General, agreed: “The range of measures announced by various Government departments will not, on their own, change the market overnight but they should address some of the confidence issues that consumers have at the moment and should be welcomed as a positive move.”
Smith continued: “These reforms will start to underpin a turnaround and if the indications that the final recommendations of the
Robin King, founder director of movewithus, commented: “The lending criteria currently being forced on banks and other lenders, which are forcing buyers to require a large deposit as a result, is the key issue. Now that the Government owns Northern Rock, they have the perfect vehicle from which to introduce radical thinking and fresh ideas to help the market, at the same time as helping the beleaguered bank limp back to profit.”
The Royal Institution of Chartered Surveyors spokesperson James Scott-Lee said: "The Government has failed to listen to the property industry and respond to market pressures and their proposed measures will have little impact on those suffering as a result of the current crisis.
“Action to increase lending by improving liquidity in the mortgage market is essential as part of a coherent package of measures alongside help for first time buyers and protection against repossession. Without making it easier to get a mortgage, the Government is doing no more than tinkering around the edges of the housing market downturn.”
Barry Naisbitt, chief economist at Abbey, said: "The measures are a welcome step to help the most vulnerable in the market but they are not wide reaching reform. While these moves undoubtably have a positive social impact on some lower income and vulnerable people, they are extremely targeted and are likely to have only a limited impact on the rest of the housing market."
Sarah Webb, chief executive of the Chartered Institute of Housing, commented: "These measures across three Government departments can make a genuine difference to the lives of many vulnerable people, and provide a short-term boost for aspiring homeowners and the construction industry. But it is not the silver bullet which will solve the problems in the financial markets. Increased liquidity in the financial markets remains the key and the final
Coogan concluded: "Over time, the housing and mortgage markets will recover. But in the meantime, the situation is painful for some homeowners, and problematic in terms of balance sheet management for lenders too. We continue to see the funding problems in the mortgage market as a fundamental bar to meaningful housing market recovery.
“We believe that the focus of the Government's attention should be at least as much on market funding as on today's consumer-targeted measures. We will continue to work closely with the government on effective implementation of this package, and on other measures which can be brought forward under the
Date: 2nd, September, 2008
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