Banks need to take risks to help first-time buyers, according to Michael Gove, who also said developers “behave like cowboys”.
Speaking to the House of Commons’ housing committee, the levelling up secretary said that lenders had been “overcautious” since the 2008 financial crash, and that offering riskier mortgages was as important as improving the planning system.
“You cannot just look at it through the prism of planning,” he said. “There are things we need to look at in the realm of mortgage finance. In the aftermath of the 2008 crash, banks and lenders everywhere became much more cautious. A problem in the American housing market led people here to be overcautious in aspects of their lending. It is difficult to move them, but you cannot have a conversation about housing affordability without looking at both supply and access to finance.”
He added that the housing crisis would not be fixed by simply building more homes.
He also said that the reason for ditching plans to encourage more housing development in London and the South East was to rebalance geographic inequalities across the country.
Gove then launched a scathing attack on the developers of dangerous high-rise buildings, who he accused of “behaving like cowboys”. He said that blocks covered in cladding had been “essentially encased in petrol” as he promised to protect leaseholders from “grotesquely disproportionate” fees.
He added that the safety advice for low-rise buildings, which has prevented thousands of households from selling or mortgaging their homes, will be withdrawn by Christmas.
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