Johnsons

Boris Johnson’s 95% mortgages will put Britain back on course for a house price crash | Josh Ryan-Collins | Opinion

This week Boris Johnson boasted that his government would “turn generation rent into generation buy” via a return to 95% mortgages for first-time buyers. In other words, easier credit to help more people buy houses.

To say we have been here before would be an understatement of epic proportions. Since the days of Margaret Thatcher, every UK government has sought to cut through the housing affordability problem with the easy and politically popular option of subsidising the demand for homeownership. Generally, this has taken the form of liberalising mortgage regulation or providing direct government subsidies for first-time buyers, most recently the various help-to-buy schemes. All have failed to bring down the price of homes.

More demand for homeownership leads to more more credit flowing into an inherently limited supply of homes. Most housing in the UK is provided at market rates by private landlords and private sector developers. These groups have no incentive to increase the supply of housing to match this increase in demand, since they generate their profits from increasing, not decreasing, prices.

The result, inevitably, is house price inflation. As result, homeownership for younger adults on middle incomes has halved in the UK in the last two decades. Similar outcomes have been seen in other advanced economies – more mortgage credit does not stimulate supply when the provision of housing is left to the market.

British politicians and policymakers seem unable to recognise these simple facts. Indeed, it took a massive financial crisis over a decade ago for politicians to allow the tightening of mortgage regulation in any significant way. Johnson may not be aware of the fact that there were quite a few 95% mortgages around leading up to the housing bubble that precipitated the UK’s 2007-9 banking crisis. The resulting economic catastrophe led to

Boris Johnson’s 95% mortgages will put Britain back on course for a house price crash

This week Boris Johnson boasted that his government would “turn generation rent into generation buy” via a return to 95% mortgages for first-time buyers. In other words, easier credit to help more people buy houses.



a person standing in front of a store: Photograph: Guy Bell/REX/Shutterstock


© Provided by The Guardian
Photograph: Guy Bell/REX/Shutterstock

To say we have been here before would be an understatement of epic proportions. Since the days of Margaret Thatcher, every UK government has sought to cut through the housing affordability problem with the easy and politically popular option of subsidising the demand for homeownership. Generally, this has taken the form of liberalising mortgage regulation or providing direct government subsidies for first-time buyers, most recently the various help-to-buy schemes. All have failed to bring down the price of homes.

More demand for homeownership leads to more more credit flowing into an inherently limited supply of homes. Most housing in the UK is provided at market rates by private landlords and private sector developers. These groups have no incentive to increase the supply of housing to match this increase in demand, since they generate their profits from increasing, not decreasing, prices.

Related: Lenders left wondering how PM’s homeowners pledge will be achieved

The result, inevitably, is house price inflation. As result, homeownership for younger adults on middle incomes has halved in the UK in the last two decades. Similar outcomes have been seen in other advanced economies – more mortgage credit does not stimulate supply when the provision of housing is left to the market.

British politicians and policymakers seem unable to recognise these simple facts. Indeed, it took a massive financial crisis over a decade ago for politicians to allow the tightening of mortgage regulation in any significant way. Johnson may not be aware of the fact that there were quite a few 95% mortgages around leading

Boris Johnson’s post-Brexit immigration legislation facing multiple defeats in House of Lords



Boris Johnson wearing a suit and tie


© Provided by The Independent


Boris Johnson’s flagship post-Brexit immigration Bill is facing the prospect of multiple defeats in the House of Lords, as peers demand greater safeguards for EU children in care and unaccompanied refugees. 

It comes after Home Secretary Priti Patel branded the asylum system “broken” and promised the Conservative virtual conference a thoroughgoing overhaul to speed up the processing of cases and allow more “immediate” returns of people with no claim to refuge.

On Monday, the upper chamber is expected to cast a series of votes on protections for EU nationals – not included in government’s immigration legislation – after the Brexit transition period expires in December 2020.

Lord Alf Dubs, who fled the Nazis as a child on the Kindertransport, has proposed two amendments, including one ensuring unaccompanied child refugees in Europe will continue to have a legal right to reunion with families in the UK.

A similar promise was given by former prime minister Theresa May, but it was noticeably absent from the Mr Johnson’s landmark Withdrawal Agreement Bill, which cleared all its parliamentary stages in January. The government has insisted it will remain a priority to help vulnerable children.

The Labour peer hopes to attach the provisions to the Immigration and Social Security (EU Withdrawal) Bill, which seeks to end the free movement, repeal EU law in relation to immigration and enable the government to implement a new migration system in 2021.

“I’m hoping that we can win that on Monday – nobody can guarantee it,” Lord Dubs told The Independent. “The government are fighting very hard against us winning anything. If it gets to the Commons, I’m hoping the Commons will then pass it.”

“This is a very humanitarian position,” he added. “It’s one [family reunions] which in principle the government accepted, but