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Survey shows MPs and lenders agree on home-ownership

News

Published: 15 March 2011 | Author: Bernard Clarke

MPs’ attitudes to home-ownership and mortgages are broadly sympathetic to the views of lenders, the findings of a new survey show. The survey, undertaken by Populus in February, sought MPs’ views on a range of questions about the mortgage market and how it should be regulated.

The results are very interesting, and show a wide spread of opinions. Almost three-quarters (73%) of MPs believed that the best way of incentivising good lending was by requiring lenders to hold more capital against riskier loans.

A majority of MPs disagreed that more restricted access to home-ownership was a price worth paying for reducing risks to the financial system (60%) and reducing risks to consumers (56%). But when asked whether regulatory tightening in the mortgage market risked going too far, opinions were far more equally divided, with 39% agreeing and 34% disagreeing.

Views on first-time buyers

Looking specifically at first-time buyers, MPs were emphatic that, in the long term, home-ownership was likely to bring financial benefits to households (90% believed this). A slightly smaller proportion (84%) agreed that it was too difficult even for people with good jobs to become home-owners, unless they had help from their parents. The same proportion saw low-cost home-ownership (such as shared ownership) as an attractive option for first-time buyers.

A large proportion (79%) could not see prospects for first-time buyers improving any time soon, and 77% believed lenders had become too risk-averse. Only a quarter of MPs agreed that the benefits of home-ownership were over-rated and that younger people should rent, while 56% disagreed.

From our perspective, the views confirmed what we expected, with the majority of consumers (and their MPs) valuing home-ownership, and seeing it as a reasonable aspiration for those who can sustain it. It also confirmed that most MPs see our members as having pulled back too far in their lending criteria. Lenders themselves would not disagree, and would probably wish to explain that this has been driven by regulatory and prudential concerns, as well as funding limitations.

The Genworth survey

Meanwhile, a separate survey commissioned by the insurer Genworth Financial found that three-quarters of MPs believed that people with a stable income but without a large deposit should have access to mortgage finance.  A slightly higher proportion (77%) believed that home-ownership was an important policy goal.

Support for home-ownership as a policy objective was particularly strong among Conservative MPs (92%).  Interestingly, this sentiment had least support among London MPs (67%), perhaps indicating that home-ownership was viewed as so far out of reach for many in the capital that other solutions needed to be examined instead.

When it came to helping first-time buyers, 83% of MPs felt their constituents needed more support, with the proportion rising to 100% for those with constituencies in London.

Three-quarters of those taking part in the poll, undertaken by ComRes in January, had been told by constituents that it was impossible to get on the housing ladder.