CML sets out what lenders need from Help to Buy
Published: 31 July 2013 | Author: Bernard Clarke
We are urging the government to ensure that the Help to Buy mortgage guarantee scheme, due to be launched next January, is straightforward for lenders to implement and administer. That will make the scheme more attractive to lenders and borrowers, and help firms introduce the systems changes necessary for launching the initiative within the short timescale before it goes live.
We welcomed chancellor George Osborne’s progress report earlier this month on plans for introducing the scheme. We have been working with the government on a range of operational issues still to be resolved and, on behalf of the lending industry, attended the meeting at which Mr Osborne gave his progress report, along with house-builders and other lender representatives.
To help make the mortgage guarantee element of Help to Buy a success, we have consistently emphasised that it should:
- Have clear criteria for success, and a clear exit strategy. The scheme is scheduled to run for three years, but will be reviewed by the Bank of England’s financial policy committee. However, lenders do not expect the initiative to become permanent or semi-permanent.
- Be supported by government measures to increase the supply of housing (not just the supply of credit). That is needed to avoid the unwelcome effects of stimulating demand without increasing supply.
Data clearly show that the mortgage market is already open for business, and government support has helped create more favourable market conditions for home-buyers. Whether or not individual lenders choose to participate in the mortgage guarantee scheme, they will continue to meet the needs of consumers for mortgage credit, and to lend responsibly.