Chancellor George Osborne has unveiled sweeping new powers to curb mortgage lending and get 200,000 new homes through the planning pipeline.
In a speech at the Mansion House, EC4, last night, Osborne pledged to remove all the obstacles that remain to development on brownfield sites.
Councils will be required to put development orders on more than 90% of brownfield sites that are suitable for housing. It will give local authorities the power to specify what type of housing will be built and get planning permission for as many as 200,000 new homes.
Osborne has teamed up with London mayor Boris Johnson for 20 new housing zones backed by new infrastructure in London.
The chancellor is also giving the Bank of England new powers over mortgages, including the size of mortgage loans as a share of family incomes or the value of the house.
If the bank believes a dangerous housing bubble is developing, it will be able to impose similar caps on loan-to-value ratios. Osborne pledged to make sure the powers are in place before the end of this parliament.
He added that if the bank does act to limit mortgage lending, the same rules will be applied to Help To Buy mortgages.
The chancellor warned that if London house prices were to continue growing at current rates, that would be “too fast” for comfort.
Osborne said that while the housing market does not pose an immediate threat to financial stability today, it could do in the future.
He said: “For there are on the horizon things that should give us causes for concern. If London prices were to continue growing at these rates, that would be too fast for comfort. And the rate of price rises is now beginning to spread beyond London. Across the country, the ratio of house prices to income is high by historical standards. And while average loan to value ratios for new lending are still well below normal, average loan to income rations have risen to new highs.”
annabel.dixon@estatesgazette.com
