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Intermediary Mortgage Lenders Association
Financial Conduct Authority
Centre for Housing Policy
Regulation is behind the lack of mortgage lending in the UK, according to a new report. Commissioned by the Intermediary Mortgage Lenders Association (IMLA), the study shows that fewer people are becoming home-owners due to British and EU regulations and a lack of innovation in the mortgage market. In fact, by 2020 just a third of young people could own their own property. This is half the number seen in 1993.What's more, author of the report professor Steve Wilcox, from the Centre for Housing Policy at the University of York, believes the market may never recover from the financial crisis. Basel III and Financial Conduct Authority regulatory requirement are cited as particular barriers to the scale of recovery. While schemes such as Funding for Lending and Help to Buy may help in the short-term, the future of the sector is anything but clear. IMLA believes that recent policies have been implemented without any wider debate about the long-term purpose of the private housing and mortgage markets.Consequently, questions remain about house purchase, the balance between homeowner and private rented markets and the consequences of regulation. Professor Wilcox calls for urgent dialogue between the government and the industry on how to proceed. Meanwhile, the government must develop a comprehensive housing strategy across all markets. This should unite currently disjointed initiatives and help to create a long-term vision for homeownership in the UK.IMLA also stresses that a safety net should be created for homeowners, who are faced with an ever-changing market and financial difficulty. This can take the form of reforms to the Support with Mortgage Interest scheme and public and private sector partnerships. Additionally, there should be attempts to encourage higher rates of home building to rebalance supply and demand.Peter Williams, executive director of IMLA, said: "Generations of Britons have been raised with the ambition of owning their own homes, which has become a key part of our national identity. But this goal threatens to disappear from view unless we consider what kind of market we want to create for the future and what can be achieved within the scope of mortgage regulations and available finance."
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