Banks need to help first time buyers Michael Gove says

Banks need to help first time buyers Michael Gove says

Banks should offer riskier mortgages to first-time buyers to help to solve the housing crisis, Michael Gove has said.

The communities secretary said that lenders had been “overcautious” since the 2008 financial crash, as he told MPs that the housing crisis would not be fixed by simply building more homes.

Gove also launched a scathing attack on the developers of dangerous high-rise buildings, who he accused of “behaving like cowboys”. He said that blocks covered in cladding had been “essentially encased in petrol” as he promised to protect leaseholders from “grotesquely disproportionate” fees.

He said that the government had a responsibility to help “innocent” flat-owners facing bankruptcy over fire safety issues, adding that it was wrong to blame leaseholders for buying properties that were poorly designed. “Some people have said it’s a case of caveat emptor. I think that’s rubbish,” he said.

Appearing before MPs on the housing, communities and local government committee, Gove also suggested that the government would devolve more powers to local mayors to deliver the government’s levelling-up agenda as he promised to deliver a white paper before Christmas.

He said that the government wanted to build more houses on brownfield sites in the north and the Midlands, arguing that concentrating development away from London and the southeast would help to rebalance geographic inequalities across the country.

Gove played down the idea that a total overhaul of the planning system could help younger generations get on the property ladder.

“You can’t just look at it through the prism of planning,” he said. “There are things we need to look at in the realm of mortgage finance. In the aftermath of the 2008 crash, banks and lenders everywhere became much more cautious. A problem in the American housing market led people here to be overcautious in aspects of their lending.

“It’s difficult to move them, but you can’t have a conversation about housing affordability without looking at both supply and access to finance.”

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He added: “Given the amount at which you would have to build in order to have a dramatic impact on affordability, you can’t say that just building new stock is the answer.”