BLOG: Can the government make banks put a roof over our heads?

But I was interested to see that the gist of recommendations laid out by BNP Paribas Real Estate and its expert panel in its Housing the Nation report was that it’s down to government - of both the local and national varieties - to ensure more housing is delivered. As panelists pointed out at the report’s launch last night, it’s the responsibility of local authorities to make sure their residents are housed.

Can the crisis be solved simply by our esteemed leaders in Westminster taking steps to sort things out? I’m not convinced.

Take mortgage lending, for example. BNP PR recommended that “more government-backed mortgages” along the lines of the NewBuy scheme (which provides first-time buyers with government-guaranteed 95% mortgages) are needed if we are to ease “prohibitive deposit levels and lending criteria”. Increasing demand would - as basic economics states - take huge steps towards increasing supply.

But so far, NewBuy has yet to achieve anything like the 100,000 completions it was hoped. In fact, three months after its launch, figures by Canaccord Genuity suggested the grand total was more like - er, five. That was largely down to an average lending rate of 5-6% - not the kind of rate a first-time buyer wants to be saddled with.

In exactly the same way the government’s desperately tried to increase banks’ lending to businesses by persuading them to sign up to lending targets which they then flagrantly ignored, banks have drawn the line when it comes to government-backed lending to first-time buyers.  The message is, you can’t ask us to lend to customers we can’t be sure will pay us back at the same time as asking us to boost the capital we hold.

Unfortunately for us first-time buyers, that means the government will continue to look pretty helpless when it comes to trying to increase the number of housing completions back up to pre-2009 levels. Ah well. Perhaps things will be different for our grandchilden…