Tackling affordability constraints in Wales is vital to achieving the Government's targets says CML

The number of loans to first-time buyers in Wales has almost halved in three years, the CML said today, as it urged the Government to do more to address growing affordability problems in the country.

Tackling affordability constraints is vital if the Government is to achieve its objective of increasing home-ownership in Wales, the CML's director general Michael Coogan told guests at the CML Cymru lunch in Cardiff today.

He added:

"Wales can be proud that it has a higher proportion of owner-occupation than any other country in the UK - standing at 73.1%. However, this is no reason to be complacent. In 2004, the number of loans to first-time buyers fell to 16,000.  Numbers have almost halved since 2001 and the downward trend looks set to continue for 2005. The current number of first-time buyers becoming home-owners in Wales is as low today as it was in the early 1990s, when property prices and interest rates were previously at their highest."    

The CML is urging the Welsh Assembly Government to encourage low-cost home-ownership schemes such as Homebuy, which is already proving to be a success in Wales. Expansion of Homebuy could help a considerable number of people into home-ownership.

In a wide-ranging speech, Michael Coogan also warned that there was still "a great deal to do" to ensure that home information packs (HIPs) were introduced successfully following the publication of regulations by the Government last week. It is in everyone's interests that the new packs do not cost more than they need to and that they do not significantly reduce the number of properties being marketed. Lenders also still have concerns about access to data in home condition reports and supervision on the home inspectors who will produce them. 

Michael Coogan concluded:

"With the average house price in Wales now nearly £150,000, it is clear that affordability issues are going to become increasingly acute for many first-time buyers. It is essential that the introduction of HIPs does not add to this burden, exacerbating the affordability constraints that already exist in Wales."

Note to Editors

1.              The Council of Mortgage Lenders’ members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. 

2.              CML Cymru’s members are drawn from 16 active mortgage lenders in Wales.  CML Cymru meets under its chair Mick McGuire (Principality Building Society) to discuss important housing and lending issues in Wales.