Lib Dems Propose Land-Buying Agency To Boost House Building

Vince Cable has proposed a state-backed agency to compulsorily purchase land for building and call for measures to allow construction on some green belt sites.  In a speech at the Royal Institute of British Architects in London, the Liberal Democrat leader also proposed a big expansion in rent-to-own, where some people in new developments could pay a market rent in exchange for a gradual stake in the property, thereby subsidising social rents. The speech in response to the housing crisis comes as the government announced £1.67bn in funding for 23,000 affordable homes across England, including 15,000 for social rent. The funding is part of a previous commitment of up to £9bn for affordable housing. Read more on the Guardian website.

https://www.theguardian.com/society/2018/jun/26/lib-dems-vince-cable-land-buying-agency-to-boost-house-building

Cable Warns Of Inequalities Caused By Housing Market Crisis

Vince Cable has warned of deepening inequality between social classes and the generations because of a fundamental crisis in the housing market fuelled by George Osborne’s Help to Buy and Right to Buy policies.  The Lib Dem business secretary said the crux of the problem was a shortage of social housing, which the government had failed to replace while offering people incentives to buy their council homes. The party’s conference in Glasgow passed a motion to give local authorities the ability to suspend Right to Buy in their areas, on the grounds that council tenants were being given huge incentives to purchase their homes without enough replacement of social housing stock. Read more on the Guardian website.

Cable Demands Action to Tackle London Housing Bubble

Vince Cable has called for action to tackle the overheating London housing market, warning that a premature rise in interest rates will hit the recovery in manufacturing and exports in the North of England. The Liberal Democrat MP told The Yorkshire Post that the housing bubble in the capital needs to be deflated. Mr Cable said: “The risk is that if you continue to get this runaway boom in house prices in the South East and particularly London then the Bank of England is tempted to put up interest rates sooner than they otherwise would do and that in turn pushes up the exchange rate and ​that makes it difficult for people to export. That’s the worry and that’s why the boil has got to be lanced.” Read more on the Yorkshire Post website.

Cable: Housing Boom 'Needs Stopping'

Action must be taken to stop the "housing boom" in parts of the UK getting "out of control", according to Business Secretary Vince Cable. He said he was "appalled" that some banks had been lending five times a mortgage applicant's income, suggesting a "stable level" was up to 3.5 times. The desires of potential homeowners should be balanced against the stability of the economy, he added. Mr Cable said that banks "must not throw petrol on the fire" by giving home loans that ran at high multiples of applicants' incomes, although he pointed out that the "boom" was only being seen primarily in the South East of England. Read more on the BBC website.

UK Needs To Build 300,000 New Homes a Year

Britain needs to build 300,000 houses a year, more than double the current number and including some on green belt land, or risk pushing house price inflation up to dangerous levels, the business secretary has said.  Vince Cable said difficult decisions needed to be made about building garden cities on green belt land, and that proposals to reduce demand by paring back government's Help to Buy scheme missed the bigger problem of a lack of supply. Cable has long warned about house price inflation, but his latest remarks are his most serious yet, and reflect frustration at the way in which David Cameron's reforms to planning laws have done little to unleash supply. Read more on the Guardian website.

Housing Bubble Brewing

Home ownership has now become “unaffordable” to people on middle incomes, Vince Cable admitted, as he warned that the bubble developing in the housing market could be more serious than during the last property crash. Amid growing tension between the Conservatives and Liberal Democrats over rising house prices, the Business Secretary told The Independent: “The fundamental problem is a chronic imbalance between supply and demand. A recovering mortgage market is just fuelling demand again.” Mr Cable warned: “A family on average income is nowhere near able to afford a house at the average price. Property has become much more unaffordable for people on middle incomes.” Read more on the Independent website.

Help to Buy Is Not Fuelling Housing Bubble, Says Cameron

David Cameron dismissed concerns from Labour and coalition ministers that the government's Help to Buy scheme may be feeding a housing bubble as he promoted its next phase. The prime minister branded sceptics of the mortgage guarantees – such as the Liberal Democrat business secretary, Vince Cable, "London-centric" and claimed that in many parts of the country prices were "barely moving at all". His defence of the government scheme came as he promoted new figures which claim to show that more than 6,000 people have put offers in on homes and applied for mortgages using Help to Buy since it was launched about three months ago. Read more on the Guardian website.

Help to Buy Should Be Dubbed Help to Vote

Help to Buy should be dubbed Help to Vote. George Osborne has promised his party to deliver half a million "hard-working" electors from the dungeons of housing debt to the sunny uplands of Help to Buy. He would shower them with £12 billion of other people's money. He could summon the spirits of Toryism past, but will they come?  The coalition's Help to Buy policy has about as many friends as the Iraq war. With house prices heading back to their 2009 peak, throwing subsidies at the soft underbelly of housing demand looks crazy. Osborne is creating a potential "bad bank" stacked with what, by definition, are marginal mortgages. The IMF, the Institute of Directors, the Commons Treasury committee, the former governor of the Bank of England and every economic commentator thinks the policy is mad. Vince Cable puts his finger to his temples. Business investment is still a third below its pre-recession level. Why spend billions on the one sector that seems not to need it?  Read more on the Guardian website.

Cameron Brings Forward Help to Buy

A controversial scheme allowing people across the UK to take out 95% mortgages will be launched next week - three months earlier than planned. PM David Cameron made the announcement as the Conservatives gathered in Manchester for their annual conference. He told the BBC's Andrew Marr show the market was "recovering from a very low base" and first-time buyers needed help to get on the housing ladder. "As prime minister I am not going to stand by while people's aspirations to get on the housing ladder are being trashed." He rejected concerns - raised by Business Secretary Vince Cable among others - of an unsustainable boom in house prices, particularly in the south-east of England. Read more on the BBC website.

House Prices to Continue Surge As Bubble Fears Grow

House prices are set to increase far faster than first thought, according to Britain’s biggest online property site. Rightmove, which advertises thousands of properties across the UK, said it was uprating its forecast for annual house price inflation from 4.5 per cent to 6 per cent with a vigorous autumn in the UK property market expected. The decision will add further weight to the argument of Business Secretary Vince Cable that the UK property market could be in danger of overheating and that interest rates may have to rise sooner rather than later. Read more on the Rightmove website.

Clegg and Alexander Reject Cable's Warning over Help to Buy

Nick Clegg and Danny Alexander have dismissed a call by their Liberal Democrat colleague Vince Cable to restrict the second phase of the government's Help to Buy mortgage scheme to areas of the country with depressed property prices. In a sign of tensions over the economic policy at senior levels of the party, Clegg and his close ally Alexander rejected Cable's warnings that Britain was facing a dangerous housing bubble. The differences between the most senior Lib Dem members of the cabinet may complicate Clegg's plans to see off calls from the left of the party for a more distinctive Lib Dem approach to the economy.   Read more on the Guardian website. 

How the Government Could Backtrack From Help to Buy

The Help to Buy mortgage scheme has proved controversial since the moment the plans were unveiled. In calling for a rethink, Vince Cable contributed the most damaging criticism so far.  “We don't want a new housing bubble," he told Sky News.  That is the primary concern of critics. The Government appears hell-bent on boosting house prices. Barratt Homes have said the average selling price of one of their homes is up 9pc on a year ago and the chief executive of Barclays raised his concern about a "property-driven boom". Meanwhile the boom in buy-to-let rolls on, with lending up by a nearly third on a year ago.  If the trends continue, and prices rises accelerate, the question for the Government will be how to backtrack from Help to Buy, without the embarrassment of cancelling it.  That would not be difficult. The 15pc of the mortgage the Government is willing to guarantee could be reduced. Offer less and the impact on the market - and risk to taxpayers - is greatly reduced. Read more on the Daily Telegraph website.

Help to Buy May Have To Be Scrapped, Cable Warns

The Liberal Democrat Business Secretary urged George Osborne, the Tory Chancellor, to consider "whether it [the scheme] should come into effect" amid concerns about rising house prices. While Mr Cable has previously raised concerns about the scheme, his intervention represents the first time he has suggested it should not come into force at all. His comments are likely to provoke a fresh Coalition row as the policy formed the centrepiece of Mr Osborne's Budget earlier this year. Read more on the Daily Telegraph website.

Housing Market Has Turned a Corner

The housing market has "turned a corner", partly because of the Help to Buy scheme, the government has claimed.  Figures show that the housing stimulus programme in England has attracted 10,000 successful applications since it was launched in April.  However, last month the Institute of Directors described the extension of the scheme as "very dangerous" because it could drive up prices.  Business Secretary Vince Cable said he was "worried" about the potential of "another housing bubble".  Read more on the BBC website.

Cable Warns Help to Buy Could Trigger New House Price Bubble

Vince Cable has warned that the Treasury's Help to Buy scheme could trigger a house price bubble.  The business secretary said he was worried about the scheme's possible impact. The policy could make it easier for people to obtain mortgages, but would have to be designed properly to minimise the potential risks.  Cable was talking about the scheme's mortgage guarantees on house purchases worth up to £600,000 that will come into effect in January next year. Another arm of the scheme, offering loans to people who buy newly built houses, was launched in April, but Cable said concerns had not been raised about this.  On the mortgage guarantee scheme, he said: "I did warn about it, and I am worried about the danger of getting into another housing bubble. If it's properly designed, it could be a useful addition.”  Read more on the Guardian website.

Cable Accuses Tories of Blocking Council House Building

Vince Cable, the business secretary, has accused his Tory coalition partners of blocking a Liberal Democrat plan to allow more council homes to be built through a relaxation of local authority borrowing rules.  The Lib Dems believe that councils could build up to 25,000 homes if they were allowed to pool their borrowing limits, releasing up to £2.8bn.  In a speech to the Social Liberal Forum Cable said this plan "opens up the possibility of sensible public borrowing to revive the depressed construction industry and to meet desperate housing need".  But the Lib Dems are being blocked by "Tory dogma", he said.  "The Tories are hiding behind Treasury methodology, saying that more borrowing by councils beyond permitted limits will break the fixed rules.’ Read more on the Guardian website.

Cable Calls for Massive House Building Programme

Extract from Vince Cable’s speech to the Lib Dem Conference 24/09/12

“One big step will be carrying out our commitment this month to get more houses built. The numbers of houses completed are currently the lowest in peacetime since the 1920s. Millions of families are in housing need. There is distress in the construction industry. The private market will only heal slowly. Because mortgages are scarce. What we need is an aggressive programme of house building by housing associations and local councils, with government providing guarantees so they can build, in large numbers, now. We need an extra 100,000 houses a year to meet demand. That would create half a million new jobs.”  Read more on the Lib Dem website.