For too long the Government has been relying on a recovery in house prices to provide a remedy for the dire state of the housing market. The truth has to be faced now: the housing market is not going to come out of the doldrums without some targeted action on government's part. From the beginning of this year I have proposed that this should include lower interest rates, a doubling of the limit for mortgage interest tax relief for at least two years, and a serious look at the opportunities for allowing the Miras benefit, which would normally be paid over several years, to be rolled up into a lump-sum payment.
But even with such measures, I believe the housing market will be crippled indefinitely while a stock of repossessed property is creating a 'bargain basement' market. You suggest that the Government needs to encourage housing associations and institutional investors to buy or manage some of the stock of these repossessed properties - I couldn't agree more. But the Government and mortgage lenders need to go further. We need an industry-wide structure to address the nationwide scale of the problem. For example, a central property management company could be set up to manage repossessed properties, to create further housing tenure options and expand the supply of local authority housing.
In the absence of a government- co-ordinated approach, Bristol & West and the National and Provincial Building Society earlier this month launched a scheme which we hope will be adopted by other lenders. The first initiative of its kind, it has involved the creation of a new company, Community Housing Ltd. This company, through managing agents, will lease repossessed properties primarily to local authorities and housing associations, to meet identified demand for rental property.
We believe this example of co- operation between building societies and the private sector could be the highly significant first step towards a nationwide programme to help the homeless, people who need better housing, and the housing market.
P. ANTHONY FITZSIMONS
Bristol & West Building Society
22 OctoberReuse content