Lender calls for new regulator to solve housing crisis

Lender calls for new regulator to solve housing crisis

Political career spans are too short to plan long-term housing developments and solving the housing shortage should be left to an independent body, says Paragon Mortgages CEO Nigel Terrington.

Speaking at Instinctif’s ‘The Great Housing Market Debate’ on 17th May, Nigel said politicians only planned for their term in office and that the government should create an independent housing body to allow for better future planning.

“Housing is a 20- to 30-year view, but unfortunately it’s run by politicians who at best have a five-year view, and the whole raft of decision making is geared to the next election,” Nigel explained.

“Back in 1997 we created an independent Bank of England because we had historically seen political interference in interest-rate setting.

“I would create an independent housing ministry that was stood outside of government and was able to operate with a 20- to 30-year horizon in housing strategy.”

Nigel said the body would serve a dual purpose.

“[It could] protect the countryside and protect the various parts of the country that need it, so it was almost like a regulator in that sense.

“But equally it would be able to then direct resources and commit to be able to set a longer-term strategy, which it simply cannot do under the current structure.”

His comments followed a discussion about the housing shortage, in which some blamed the government for not meeting the demand for homes.

Abdul Choudhury, London Policy Officer at the Royal Institute of Chartered Surveyors, said: “The government has consistently failed to recognise the need for housing across 10 years and failed to engage with a variety of housing developments.

“There’s no single, silver bullet, there’s quite a few actually.”

Meanwhile, Nick Hopkinson, Director of commercial real-estate firm PPR Estates, said: “Our biggest issue is planning at a local level, with that taking far longer than it should and huge amounts of bureaucracy and vested interests blocking [us] at every turn.”

John Tutte, Group CEO of property developer Redrow, agreed that bureaucracy was partially to blame.

“The problem is there’s too many barriers [such as] planning, which is far more technical than it used to be, and, of course, funding.”

However, John added that the government also held the solution to the shortage.

 “There is a case for more public-sector housebuilding programs to be introduced across the country, and we need to do something to get small- and medium-sized housebuilders growing.”

Despite this, Nick explained that the government was not the only source of difficulty in housing developments.

“The other big challenge we have is what I would describe as rampant dishonesty and a lack of integrity among the contractor market, in terms of unprofessionalism and in making [it difficult] to budget and control construction projects to plan.”

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