From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Low Cost Home Ownership: an overview

Last updated: 4 September 2017

At a glance

CML position 

  • We recognised in our CML manifesto 2015 that the intermediate market and shared ownership in particular, is becoming a permanent tenure rather than a step to full ownership.
  • We call on government and policy makers to maintain focus on core established models for shared ownership and shared equity, which are proven and acceptable to lenders.
    • In shared ownership: lenders expect the standard lease with minimum share purchase and mortgagee protection.
    • In shared equity: lenders expect the “Mortgage Market Review (MMR) compliant” help to buy approach.
  • Any innovative approaches should be capable of delivering scale and volume and include key elements lenders need and expect to see, such as the standard model lease in shared ownership, and the “MMR compliant” approach for shared equity schemes where the equity stake does not fall to be repaid until after the expiry of the main mortgage.
  • Extending RTB to housing associations raises a number of issues for CML members, who are commercial funders to the housing associations concerned. We await full details of the proposals to become available. 

Why this is important for lenders 

Low or reduced costs home ownership schemes in the intermediate market are an important way in which government and the mortgage lending industry can support low to middle income households into home ownership.  

LCHO schemes are vital in tackling affordability challenges for many households, particularly in higher value areas. For governments, it is a high priority to increase new housing supply through these schemes, and there are strong expectations on the lending community to support this market. 

The proposed extension of Right to Buy to housing associations on social housing funding and regulation will raise issues for CML members as commercial funders of the housing association sector.

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