Supplementary memorandum by the Council
of Mortgage Lenders (CML) (AH 37(a))
When the CML gave evidence on 28 November we
promised to provide a response to the question raised by Alison
Seabeck MP regarding Mr Prescott's competition for a £60,000
home and whether any link had been made with the LPS 2020 standard
for homes built using modern methods of construction (MMC) being
developed by the BRE and the BBA in conjunction with the CML and
the ABI.
Unfortunately there has so far been no link
up between LPS 2020 and the £60,000 competition, or indeed
the recently announced Code for Sustainable Homes. LPS 2020 has
been developed by BRE with close co-operation from the CML and
ABI in order to ensure that innovative housing designs achieve
a mortgageable standard and that they will be able to attract
buildings insurance on normal conditions. As I made clear at our
meeting lenders and insurers have consistently voiced concerns
to ODPM that there is a risk that the new generation of MMC may
reproduce many of the problems associated with previous generations
of innovative construction. Much 20th century pre-fabricated social
housing, which has leaked into the private housing market via
the Right to Buy and other purchase schemes, is beset by defects,
often rendering it unmortgageable and presenting additional risks
for insurers. It is important that measures are taken to ensure
that the future does not resemble the past.
It was because there was little recognition
of, or interest in, lender concerns by ODPM or the Housing Corporation
that lenders and insurers decided to tackle the problem directly
by sponsoring a certification standard that would provide appropriate
comfort and additionally safeguard consumers also. While the Housing
Corporation has been involved in the development of LPS 2020,
neither they nor ODPM have so far seen fit to integrate this with
other work.
This lack of co-ordination can be seen as part
of a larger problem. It has been noted by a number of stakeholders
that there are a plethora of codes, standards, kite marks and
assurance schemes associated with the building of new homes, with
building regulations underlying them all. The CML and others have
argued that there is a strong case for rationalisation in this
area.
Peter Williams
Deputy Director General
| 
