The EACB welcomes the call for evidence on "Housing supply and affordability" and stresses that the persistent supply-demand gap, compounded by rising construction costs and higher interest rates, emphasises the urgency to reduce regulatory complexity.
A key priority should be to streamline requirements, shorten planning and permitting procedures and lower unnecessary administrative and regulatory costs related to construction. EU initiatives should therefore focus on removing barriers to new construction and renovation rather than introducing additional layers of obligations.
A regulatory framework fit for purpose will help ensure that financial stability and housing affordability go hand in hand. From our perspective, certain prudential developments related to the implementation of Basel III, including the output floor, will increase capital requirements on low-risk residential lending beyond necessary financial stability concerns, reducing banks’ capacity to finance homes and renovations.
We suggested reforms in the following areas:
- Output floor and transitional measures
- Treatment of ADC exposures
- Hard test