A call for mortgage indemnity guarantees to help first-time buyers has been made by the CBI.
In a report out this morning, Unfreezing the housing market, the business group also called for stamp duty to be reviewed, and suggested that first-time buyers could be allowed to borrow, at low interest rates, against their own pension savings.
It suggested that mortgage indemnity guarantees should be provided by developers and lenders to first-time buyers with small deposits, with the Government possibly acting as a long-stop guarantor.
John Cridland, CBI director-general, said: “We have to do more to give our young people hope in the future and support their aspirations to be home owners.
“While we would not want to see a return to overly-risky lending practices and unsustainable personal debt levels, it is important that we get credit flowing to those who need it most.
“We could reduce the risk of higher loan-to-value mortgages if the Government encouraged lenders to take out insurance against the borrower failing to meet payments.
“We can also jump-start the housing market by allowing first-time buyers to boost their deposits by borrowing their own pension savings, and ensuring existing owners who want to move house have more options.
“Owning a home has been a natural aspiration for generations of Britons since the 1950s, and should not become the preserve of a lucky few.
“Without a steady stream of first and second-time buyers, the housing market freezes and the whole economy suffers.”
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Comments
How about we link it to the first time buyers body parts such as kidneys. The banks can give you a 125% mortgage and if you default your organs can be harvested.
The simple way to boast the housing market is to put up interest rates up to 5% and allow house prices to fall back to normal levels. Then once affordable there will be more transactions and home related trade.
Is the CBI being lobbied by the big builders by any chance.
We used to have these years ago and then they went away when the market started to move on its own. Never did see any real benfits to anyone but the wags who invented the idea. This is not new so I guess someone turned over an old stone.
Sounds good but I agree with RR on this.
"We can also jump-start the housing market by allowing first-time buyers to boost their deposits by borrowing their own pension savings"
There's no way that can go wrong...
After that, they'll be suggesting FTBers borrow from their unborn children's pensions. Anything to keep the Ponzi Pyramid going!
Good work CBI.
The housing market is a leading indicator in the economy, so should be a priority - and I don't mean building local authority match boxes with taxpayers' money for Wayne & Waynetta Slob.
I doubt wet fart Cameron will have the spine to do it though.