Kathleen Scanlon

Mortgage Product Innovation in Advanced Economies: More Choice, More Risk

Abstract In many developed countries, house prices have been rising rapidly, mortgage debt has been increasing and affordability has worsened. It is in this context that the standard annuity mortgage is increasingly being supplanted by mortgages with non-standard features, such as longer terms or interest-only payments. Many of these new features aim to reduce the borrowers monthly debt service in the initial period of the loan. While these new mortgage types help households to enter owner-occupation and to vary their expenditure patterns, the long-term cost to the borrower cannot normally be less than for a standard product. Moreover, such mortgages can also be more risky: the interest-only borrower does not accumulate equity as an annuity borrower does, and loans with longer terms expose the borrower to greater risk of interest-rate or other economic shocks. As a result both borrowers pay more and the housing finance system may be more fragile. This paper brings together evidence from 13 developed countries about house prices, debt and affordability, and particularly the availability and market share of mortgages with these new features. It analyses trends over the last ten years and discusses the risks of these mortgages compared to standard annuity products.

Responding to the Housing and Financial Crises: Mortgage Lending, Mortgage Products and Government Policies

Abstract The long period of house price growth in markets across the world ended with the US and global financial crisis of 2007/08. The crisis and the consequent recession had profound effects on mortgage market actors – including households, institutions and governments – in most advanced economies, whether or not they participated in this rapid house price growth. Many of the trends observed during the boom, especially the innovations in financial instruments, were reversed. This paper presents evidence on how mortgage markets and stakeholders responded in the initial period after the crash. In particular it reports on a 2009 survey of housing experts from 16 industrialised countries, which concentrated on how each countrys mortgage system responded to the crisis and how governments addressed the problems of borrowers.

Business Privilege and the Strategic Planning Agenda of the Greater London Authority

The establishment of the Greater London Authority (GLA) in 2000 brought a new form of politics to London and new powers to formulate strategic policy. Through an investigation of the access of business interests in the formulation of Londons strategic agenda, this article illuminates one aspect of the pressures on city government. It uses the urban regime approach as a framework for analysing the co-operation between the Mayor and business interests in shaping strategic priorities. Although there was a surrounding rhetoric that pointed towards a greater consensus-seeking approach, the business sector was very active in maintaining its privileged access. Strategic priorities were established in the GLAs first year and were then subsequently embodied in the London Plan. Our analysis is based on a detailed examination of this agenda-setting period using material from meetings, written reports and interviews with key actors.

The Greater London Authority: a case of conflict of cultures? Evidence from the planning and environmental policy domains

The creation of the new Greater London Authority (GLA), with effect from June 2000, has provoked considerable interest in policy and academic circles. It stands as an innovation in London governance, an experiment with the mayoral system in British politics and another example of the New Labour programme of modernisation. For all these reasons, the GLA provides an interesting focus of study. The particular focus of this paper concerns the internal dynamics of the GLA as it strove to establish its policy agenda and modus operandi. We were not so much concerned with policy outcomes in terms of documentation and its orientation, but rather the developing nature of the GLA as an emerging organisation. To this end we analyse the first year of the GLAs operation using the perspective of cultural theory, emphasising the nature of the GLA as a set of overlapping institutions. Developing Hoods and Coyles applications of cultural theory enables us to comment on the tensions apparent within the GLA in its first year and the prospects for integration across the GLA. It also enables a reassessment of the value of such a cultural theory framework in contexts of organisational evolution.

Development of new cohousing: lessons from a London scheme for the over-50s

There is increased interest in the UK in cohousing as a desirable alternative for older people. The economics of developing cohousing differ from the normal model for residential development; in particular, the participatory nature of the process increases the time required and there are higher risks for both resident/purchaser and developer. We examine the nature of supply and risk using the case of a new senior cohousing community in south London. Given its evident benefits, senior cohousing may eventually become more widespread, and perceived risks will fall. However, the nature of the residential development process means that cohousing will always be at a disadvantage when competing for land in high demand areas like London, and the time required for participatory processes increases costs. To currently increase the small number of cohousing communities in the UK and ensure affordability, targeted measures may be necessary to enable groups to access land and mitigate the higher costs associated with longer term collaborative processes.

A Review of “Housing Allowances in Comparative Perspective”

landlords, at whom deterrence is properly aimed, will drop out of the market. It is more likely that the most evasive will continue to flout the law, but in time may be more easily exposed. Some landlords have, however, strong incentives, for reasons of market advantage, to sign up to the system of accreditation. For English readers, who are interested in the actual situation in the private rented sector in Britain, this book must be a goldmine with detailed and qualified analyses of different aspects of the sector. For readers from other countries it is of interest to learn about the consequences of a more or less totally deregulated rented sector. The book is, however, not very easy to read. Some of the chapters are to some extent written with sympathetic understanding and the widespread use of abbreviations makes it difficult to read. You can learn from the book what market segments the private rented sector serves but there is not much information on what deregulation has meant to the situation and security of tenants.