The majority of MPs believe more must be done to help first-time buyers, research from Genworth Financial shows. About Time - we say!
A survey commissioned by the specialist insurer and carried out by ComRes reveals 75% of MPs think people with a stable income but who are unable to put up a deposit of 10-20% should have access to mortgage finance provided repayments are affordable.
Furthermore, 83% of those asked stated their constituents need more support in getting on the housing ladder, a figure that rises to 100% for MPs with constituencies in London.
The survey also shows 84% of respondents agree that a more fluid housing market, stimulated by easier access for first-time buyers, would help the UK’s financial situation and improve the social mobility of their constituents.
Angel Mas, president of mortgage insurance for Genworth Financial in Europe, says: “The deposit remains the biggest barrier to homeownership in the UK, along with the prudent approach taken by lenders, which are allocating their scarce capital to other segments of the mortgage market.”
He says it is crucial that high loan-to-value lending returns to the market in order to make it accessible for individuals who have a sound credit profile but are unable to save for a deposit.
“Lenders can participate safely in the high LTV segment by transferring default risk to a specialist insurer. This model creates additional safeguards for the overall system as insurers will only accept this risk if appropriate lending criteria are applied and monitored.”
Mas highlighted the example of other major economies that have continued to make finance available to first-time buyers.
He adds: “This framework already exists in a number of other major economies which have withstood the economic crisis, with the flow of credit to prime first-time buyers remaining open through the cycle. The urgency of this situation should point towards their example rather than looking for new and untested solutions.”
Thanks to Mortgage Strategy 14.03.11
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