Government is its “own worst enemy” on housing, warns Cable

The Housing Policy and Delivery Oversight Committee chaired by former business secretary Sir Vince Cable has accused the Government of undermining its own housing ambitions through a mix of well‑intended but conflicting interventions – and warned that the consequences will be felt acutely by borrowers and the intermediaries who advise them over the next two years.

The committee, which is sponsored by Family Building Society but operates independently, argues that the Government’s 1.5 million homes target is becoming ever harder to deliver as new build slows, costs rise and planning capacity is hollowed out – all against a backdrop of long‑running under‑supply.

Sir Vince said the Government is “looking like its own worst enemy by trying to make building easier with one hand but making it more difficult with the other”, pointing to a policy mix that seeks to speed up planning while simultaneously increasing development costs and uncertainty.

For Mark Bogard, chief executive of Family Building Society and a member of the committee, the risk is clear: a structurally imbalanced market that leaves more would‑be buyers – especially first‑time buyers – locked out, and pushes existing homeowners to sit tight rather than move.

“A market bunged up by Stamp Duty”

From a borrower and broker perspective, Bogard characterises the next 12–24 months as a period where underlying supply constraints – not just short‑term rate moves – will increasingly shape client outcomes.

“Borrowers and brokers want a well‑functioning, affordable liquid housing market. Not one with a structural imbalance of supply and demand and bunged up by Stamp Duty Land Tax,” he told Mortgage Introducer. “Although new build only accounts for one per cent of total housing stock, the failure to deliver homes in sufficient numbers adds pressure on the existing availability of homes. There is the danger of pricing out a large section of the market – it’s simple economics.”

For intermediaries, he expects that to translate into more reactive advice and fewer clean, chain‑free purchase cases.

“Brokers may see an increase in remortgaging and product switches as homeowners stay put, and will no doubt see an increase in issues of first‑time buyer affordability,” Bogard added.

In other words, even if headline transaction volumes remain subdued, adviser workloads are unlikely to fall – but more of that work may be focused on managing affordability constraints and reshaping existing borrowing, rather than supporting aspirational movers.

Building Safety Levy already chilling schemes

One of the committee’s starkest warnings centres on the interplay between safety regulation and scheme viability. While the Building Safety Levy is not due to take effect until 1 October 2026, Bogard says the impact is already being felt in developer behaviour.

“Although not due to come into force until 1st October, it is already having an effect. House builders are concerned as it threatens the viability of new developments so may shelve plans on sites which already have permission and defer future planning applications,” he explained.

Combined with new high‑rise safety rules, the committee believes the levy risks tipping marginal schemes over the edge and accelerating a slowdown that is already evident in housing starts. That, in turn, means fewer completions feeding through into broker pipelines in the second half of this decade – precisely when the Government says it wants to accelerate delivery.

At its latest meeting, the independent committee highlighted a range of interconnected barriers:

• A slowdown in new build and a shortage of affordable homes

• The Building Safety Levy threatening scheme viability from October 2026

• New high‑rise safety rules constraining both new build and refurbishment

• Acute skills shortages, including planning officers, driving delays

• Local government reorganisation leading to postponed decisions and fewer planners

• High planning costs by international standards, curbing innovation

• A policy focus on new build that prolongs the gap between application and decision

Against this backdrop, Sir Vince argues that simply tweaking planning rules will not be enough if development economics continue to deteriorate.

Why existing stock and downsizing must move centre stage

One of the committee’s core messages is that new build policy has dominated the housing debate to the exclusion of other levers – even though new homes make up only around 1% of the overall housing stock in any given year.

“With new build forming only one per cent of the housing stock at most, policies encouraging improving existing properties and downsizing are essential otherwise reaching the 1.5 million new homes target will be extremely difficult,” Sir Vince said.

Bogard is even more direct about where the next Government should focus if it wants to free up larger homes and improve utilisation.

“People over 65 own a disproportionate amount of the larger housing stock and have disproportionately low levels of occupancy. Therefore, convince older people to downsize,” he argued. “However, we at the Family have always argued that Stamp Duty Land Tax is one of the biggest inhibitors to moving.”

He points to Family Building Society’s research with the London School of Economics on the pandemic‑era Stamp Duty holiday, which found that temporary SDLT cuts generated a clear uptick in transactions and wider economic activity. In his view, any serious attempt to encourage downsizing and better use of existing stock will have to confront the role of transaction taxes head‑on.

Yet even if tax barriers are addressed, the planning system remains a major brake. Bogard noted that “the glacial speed of the planning process is well known” and says it is “too early to measure the effect of the Planning and Infrastructure Act which recently became law”. For now, he sees little evidence that chronic shortages of planning officers – likely to be exacerbated by local authority reorganisation – are being tackled in a way that would meaningfully speed up delivery.

“Housing matters to everyone every night” – but policy remains fragmented

Asked which part of the market he is most worried about if nothing changes – first‑time buyers, older borrowers, or social housing tenants – Bogard’s reply is blunt.

“All of them! We need a functioning housing market; not a broken one,” he says. “The Housing Minister should be one of the great Officers of State, alongside the Prime Minister, Chancellor, Foreign and Home Secretaries because housing matters to everyone every night when they go to bed. Instead, we have had 26 housing ministers in 27 years.”

For Bogard, that churn is symptomatic of a deeper failure to treat housing as a truly integrated policy area.

“Housing in all shapes and forms is entirely interrelated. That’s why housing policy has to be integrated to avoid unintended consequences and to deliver benefits for the whole sector,” he said. “Not building enough new homes threatens the availability of Section 106 social homes, for example. Rising material costs, and a lack of a skilled workforce drives up prices for everyone – buyers and renters.”

Demand‑side interventions – whether Help to Buy‑style schemes or looser affordability rules – do little to address those structural issues, he warned.

“Demand led initiatives simply increase prices and regulation overburdens developers and stymies decision makers. So, anyone seeking a roof over their head is affected when we can’t deliver the homes that people need.”

What lenders and brokers are getting right – and where they must go further

If the solution “is on the supply side not the demand side”, as Bogard insists, where does that leave lenders and intermediaries? While they cannot build homes, they can adapt products and advice models to better fit today’s constrained market.

“Helping the demand side tends to just push up prices more as it simply allows more people to be able to pay more. But politicians have told us that, even although they know this to be true, it is so much easier to deliver on the demand side, by for example changing the rules and regulations on affordability,” Bogard said.

He acknowledges that the industry has already moved in important ways. Following the FCA’s recent clarification around affordability, lenders have begun to “moderately relax affordability criteria to better support both first‑time buyers (FTBs) and later life customers”, within regulatory guardrails. In parallel, several lenders have launched higher loan‑to‑value products, including 98% and 100% LTV options, in recognition of the difficulty many new borrowers face in saving for deposits.

There is also a “growing strategic emphasis on intergenerational lending”, with enhancements to joint borrower sole proprietor (JBSP) LTV thresholds enabling wider family participation to support affordability.

On the later life side, Bogard notes that the mortgage market “has expanded significantly in recent years”, driven by extended maximum age terms and greater flexibility around interest‑only. In 2025 the FCA issued a consultation on later life lending, warning that advice remains too siloed and calling for more holistic, integrated support across product sets and life stages. Trade bodies including IMLA, UK Finance and the Equity Release Council are also increasingly focused on the “silo question” and the need for joined‑up advice.

For brokers, this all points in one direction: more complexity, not less. Advisers will be expected to navigate a wider toolkit – from JBSP and guarantor‑style options to retirement interest‑only and equity release – while also helping clients understand the limits of what those products can solve in a market where government housing delivery “continues to fall short of stated construction targets” and social housing supply remains under severe pressure.