CML news & views

We welcomed the announcement of more help for struggling first-time buyers in the government’s recent draft legislative agenda.

One of its key announcements was a widening of the shared equity scheme, giving all first time-buyers with an income of less than £60,000 the opportunity to apply to buy a share of their home.

Unveiling the government’s legislative plans, the prime minister also announced an allocation of £200 million for the Housing Corporation to buy new properties on the open market. These homes will be available either for first-time buyers to purchase through the Homebuy scheme or for social renting.

Although such a level of funding will have only a modest impact on the housing market, it does have the potential to widen the first-time buyer shared equity scheme.

The prime minister’s announcement means that the government is now proposing a more logical approach to help for first-time buyers, providing assistance purely on the basis of the income, rather than the occupation, of buyers. Its proposals will remove an anomaly by which helping one group of less well-paid employees makes access to home-ownership more difficult for those earning similar salaries, but working in different occupations.

The legislative programme also contained proposals to allow the Bank of England greater flexibility to respond to credit market conditions by allowing short-term non-disclosure of liquidity assistance. We welcome this, believing that the Bank should have flexibility to respond to changing credit market conditions.

The programme contained a wide range of other measures that may affect lenders, including:

• a banking reform bill, due later this year, including measures seeking to prevent banks experiencing difficulty, improve depositor protection and change the insolvency law;
• proposals to work through the Financial Stability Forum and the EU to make the global financial system more resilient, with better risk management by banks, changes to the role of credit ratings agencies and better functioning of securitisation markets;
• a bill to extend the powers of the new social housing regulator overseeing local authority and social landlords;
• welfare reform, which will include a review of housing benefit;
• a housing reform green paper, published later this year, seeking to provide housing services and promote economic independence and social mobility;
• consultation on proposed zero-carbon standards for new homes;
• consultation on a draft floods and water bill; and
• an equality bill, aiming to bring together and simplify legislation on all forms of discrimination, perhaps including age discrimination in financial services.