UK Finance has released its report ‘Homes We Need’ ahead of the Budget next month, which proposes solutions to complement the government’s plans for housing, including an overhaul of the planning system, a permanent stamp duty cut and measures to ensure housing allowances keep pace with rents.

The banking body, which represents more than 300 firms including 120 mortgage lenders, says these are just some of the reforms needed to address the UK’s 4.3 million housing shortfall.

UK Finance highlights the fact that the banking and finance sector plays, and will continue to play, an essential role in providing mortgages and finance to the housing market. It adds that the new government has acted quickly to encourage more housebuilding and ensure that affordable housing is a key part of its new targets. However, the progress needed will not be achieved without cooperation across the public and private sectors.

UK Finance wants to work with the government to:

Support the housebuilding industry by ensuring that the overhaul of the planning system makes it simpler, and more rules based. Shorter development timescales and consistency in planning decisions will help give developers the certainty they need to deliver the government’s new homes target.

Support home ownership by helping first-time buyers to purchase the homes they need, through making permanent the current temporary nil-rate bands on stamp duty up to £425,000; increasing access to shared ownership schemes; and reviewing whether prudential rules introduced after the global financial crisis have made it too difficult for potential borrowers to obtain a mortgage.

Also, by helping “last time” buyers through an independent advice service to assist older homeowners with their housing needs and minimising upfront costs for those choosing to downsize, such as a stamp duty exemption. The government’s housing target should also include homes suitable for older buyers in places they want to live.

Support the rental market by reviewing the Local Housing Allowance annually so it keeps pace with rents. Creating a government sponsored registration system for owners of rental properties will both ease the compliance burden on landlords and help local authorities, mortgage lenders and tenants identify rogue landlords or sub-standard properties. Providing tax incentives could also encourage landlords to make green upgrades to their properties.

Charles Roe, director of Mortgages at UK Finance, said: “Everyone needs a safe, secure, and affordable home, so we welcome the government moving quickly to reduce the UK’s housing shortfall and get more people onto the housing ladder.

“However, the size of the challenge means we need strong action, from both the public and private sectors, right across the UK’s housing market.

“Our new report sets out a range of recommendations to complement the government’s plans. These include making the planning process simpler, removing some of the barriers first-time buyers face and ensuring we’re meeting the housing needs of our ageing population. Improving standards in the private rental sector and supporting the social and affordable rental sectors will also be key.”