In My View - 19th May by Conservative MP Marcus Fysh

I am proud to support the government's attempts to make home ownership easier for people, especially the younger generation. Help to buy, right to buy, help to save, the Lifetime ISA, reduced stamp duty, starter homes, capital gains tax being levied on foreign purchasers, landlords' ability to deduct interest costs on purchases from their tax being reduced - all are helping.

Income tax thresholds continue to be raised to help people keep more of their own money, save for a deposit and make payments on a mortgage, and we are investing in infrastructure, skills and education to help people earn more.

One of the reasons housing is so much dearer than it used to be is that the cost of finance is much lower, with historic lows for rates on mortgages making them easier to afford. Over the last 25 years mortgage interest rates have fallen from 15% to around 3% per annum. This has been a global phenomenon, not one specific to the UK.

Demand for housing has also outstripped supply, pushing prices beyond what could have otherwise been expected. One of the reasons for this is that net migration to the UK has increased dramatically since 1997. Much of this occurs in the South East of England, but one effect here is that many people from the South East then find the South West more cost effective, as well as a great place to live. To the extent that these flows can be managed, it will be easier to meet housing demand with supply, and taking some of the heat out of the housing market would be good for homebuyers.

It is worth saying, with my 23 years' experience of international investing in markets, currencies and companies, that I believe the effect of voting to leave the EU on interest rates would be minimal. In my view long and short term interest rates will remain suppressed by demand for government bonds from burgeoning central bank liquidity, and a lack of safe alternatives. 

I also think the pound would remain well supported. Four fifths of companies are already positioned for sterling weakness, and foreign exchange desks of most banks have been instructed not to take any risk just now, meaning volatility is higher than normal and sterling has already weakened by 5% over the last 7 months. I think many real money investors would see further weakness as a buying opportunity, and the need to rebalance those negative positions would mean buyers matching sellers.

We have a big chance with the dualling of the A303 to look at how we can use infrastructure investment locally to expand the supply of housing and jobs and take some development pressure off our market towns and villages. I believe we also need to have an even more ambitious look at regeneration and build on the good work already in progress on projects like the Chard Regeneration Scheme. I look forward to working with the local councils over the coming years to think laterally in this way about how to achieve solutions to some of our more endemic problems.