Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
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Poor mortgage market management by governments and greedy lenders is blamed for triggering the global financial crisis and hindering recovery in a blistering study.
Lenders giving easy access to credit fuelled rising house prices – and irresponsible banks were aided in pushing the economy to the brink by the lack of financial regulation from governments.
The solution, says the Organisation for Economic Co-operation and Development (OECD), a think tank sponsored by all the world’s major economies, is a combination of reforms overhauling tax, rental market rules and financial sector regulation.
The OECD has issued a roadmap for governments to follow for promoting sounder housing policies.
“OECD countries have seen the damage caused by badly designed policies through their effects on housing markets,” said OECD Secretary-General Angel Gurria.
“As we search for new sources of growth, as we seek to restore trust in our financial sectors, as we try to green our economies, policies related to housing can have a huge impact on our future”.
Lenders in bitter battle against mortgage reform
The OECD says that easy credit over the past two decades amplified price volatility, with real housing price jumps of 90% or more in Australia, Belgium, Finland, Ireland, Netherlands, New Zealand, Norway, Spain and the UK.
At the same time, deregulation and innovation in mortgage markets – coupled with inadequate supervisory frameworks – contributed to a significant relaxation in lending standards, an increase in non-performing loans and the sub-prime crisis.
The OECD recommends tighter controls over mortgage lenders and the availability of mortgages.
The UK’s Financial Services Authority is already moving towards this against bitter arguments from banks that claim home loans will be restricted to only a few borrowers if the rules are imposed on them.
The FSA’S mortgage market review includes proposals to scrap interest only loans, to restrict borrowing limits to 75% of a home’s value and to force lenders to make sure customers can afford to repay a loan.
The FSA proposals are backed by an EC mortgage directive containing many similar proposals that will soon come in to force in the UK.
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