The solution to England’s housing undersupply crisis can be stated very simply: a restoration of mortgage funding on affordable terms so that latent demand can be turned into effective demand; and a significant and sustained increase in the supply of permissioned, viable land for new housing. But this simple statement hides enormous obstacles.<br> <br> effective demand<br> <br> The outlook for the mortgage market is especially uncertain. Massive refinancing requirements, tighter mortgage regulation, higher interest rates and the market’s reliance on a small number of major lenders all point to restricted mortgage availability, higher mortgage costs and restricted availability of higher loan-to-value (LTV) mortgages.<br> <br> The Council of Mortgage Lenders (CML) has warned that by 2015 lenders will have to refinance £300bn of mortgage funds currently supported by government and Bank of England schemes, with 2011 the peak refinancing year. The Bank and Treasury have categorically ruled out extending their special support schemes.<br> <br> Refinancing on this scale points to higher funding costs, and therefore higher mortgage rates. In addition, at some point over the next 12 –18 months, the Bank Rate will begin to rise, adding to upward pressure on mortgage rates. <br> <br> Higher LTV mortgages seem destined to …