Boris Johnson outlines 'comprehensive review' of mortgages in major speech

The Prime Minister used a housing speech in Blackpool yesterday to outline plans for a wide-ranging review of the mortgage market and housing benefit rules to boost homeownership across the UK.

Just days after a no-confidence vote in his leadership, which saw 148 Conservative MPs vote against him in an unexpectedly large rebellion, Boris Johnson tried to come out fighting with his latest address.

The speech was heavy on pledges for support on business and household costs but less strong on actual policy, with Johnson particularly concentrated on helping with the highest 'cost of household expenditure' – housing.

Plans he announced included a 'comprehensive review' of the mortgage market, reporting back this autumn. The aim is to give people better access to low deposit home loans and examine what the industry can learn from counterparts across the globe.

The speech also reiterated the government's commitment to helping leaseholders buy their freehold at a large discount, saying they would 'supercharge' this, while also confirming the speculation that Right to Buy would be extended to housing association tenants. To offset any loss in supply, a regular criticism of the controversial Right to Buy policy, which has been scrapped in Scotland and Wales in recent years, Johnson insisted that one new home will be built for each that is purchased.

The PM also said the government will explore how it can securitise the multi-billion pound housing benefits bill to build more social housing.

Reacting to the leasehold plans, Andrea Lumb, Group Operations Director at mortgage advice firm UK Adviser, said: “Many parts of the industry will be delighted if the government follows through on its promise to supercharge leaseholders’ ability to buy their own homes, as announced in Boris Johnson’s housing speech today, not least the mortgage industry which has faced difficulties in lending on leasehold homes, in some cases rendering them unmortgagable and unsellable. 

“Many will remain sceptical about this latest pledge – especially from a PM who has recently faced a no confidence vote and is under pressure to provide popular policies – but this issue is something that affects millions and it’s vitally important that it is tackled in the appropriate way. Hopefully words will now be followed through with something more decisive.” 

Marc von Grundherr, director of Benham and Reeves, gave short shrift to the planned Right to Buy social housing policy. “We’ve seen how previous initiatives allowing social tenants to purchase their properties has backfired, as it causes a significant shortage of stock for those most desperately in need of help, while also driving up property values in the process. 

"Of course, this time around it will be different, as they pledge to replace these purchased properties on a one for one basis. Unfortunately, if you believe that, you may also believe that the drunken shenanigans that took place at Downing Street during the pandemic really were innocent, work-related events." 

He added: "The government’s record of delivering new homes is woeful at best and social housing has long been an area of serious neglect. To allow them to auction off existing housing association stock while also failing miserably to replace it would be a big mistake indeed.”