CML responds to RTB consultation
This is in response to the announcement by the government of its consultation on a revitalised right-to-buy programme.
Paul Smee, director general of the Council of Mortgage Lenders, said: “It is worth noting that the Financial Services Authority’s recently-published mortgage market review proposals would require advice to be given on all lending to right-to-buy borrowers, which is a significant protection that we think makes sense.
“As with all other mortgages, lenders will need to conform to all relevant regulatory requirements, reflect their own risk appetites and take account of both the borrower’s circumstances and whether the property represents adequate security, just as they do on all lending.”
Earlier today, housing minister Grant Shapps said the restrictions on discounts over the past few years had made right-to-buy meaningless in many parts of the country, with fewer than 3,700 sales last year compared to a peak of 84,000 less than 10 years ago.
The government is now proposing to increase the cap to £50,000, effectively trebling the discount in some parts of the country so more tenants can get a foot on the property ladder.
Shapps said: “When this government came to power our inheritance was a paralysed housing market and a devastating collapse in construction. The builders had stopped building and millions of hard-working, aspiring home owners were blocked from taking their first step on the property ladder.
“This is especially true for people living in social housing. The previous miserly restrictions on discounts meant right-to-buy became, for many tenants, nothing more than an empty promise – a social mobility scheme run by Ebenezer Scrooge.
“That’s why I am today publishing proposals that will dramatically increase the discounts under right-to-buy, ensuring it once again becomes a meaningful tool to support social tenants who want to buy the home they live in.
“But we are also determined to maintain the number of affordable homes for rent – so for the first time, every additional home that is sold will be replaced by a new affordable home on a one-for-one basis. The new homes for affordable rent will help get the nation building again, and help councils meet housing need.”