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Labour Party to host ‘emergency’ mortgage summit with brokers ‒ report

  • 10/07/2023
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Labour Party to host ‘emergency’ mortgage summit with brokers ‒ report
The Labour Party will host an “emergency” mortgage summit with brokers to discuss the impact of the “mortgage crisis” on first-time buyers and homeowners and explore options.

In an opinion piece in The Express, Shadow Chancellor Rachel Reeves said that herself and Lisa Nandy, Shadow Secretary for Levelling Up, would meet brokers to hear about how rising mortgage rates were hitting first-time buyers and homeowners.

Reeves said that Labour had set out a package of “mandatory mortgage measures” to ensure lenders were “doing all they can for borrowers to help them through this crisis”.

She added that Labour would look at bringing out a mortgage insurance scheme where the state acts as a guarantor for those struggling to save for a deposit, reform planning so communities and councils have more control and bolster housebuilding.

Reeves also added that long-term fixed rates would be examined as an option to help struggling borrowers.

“Britain deserves a government that will open up opportunity – that will back the builders, not the blockers. That is what a Labour government will do, and is why we are the only party for people who dream of owning their own home,” she said.


Summit needs to have range of brokers to be ‘successful’

Brokers were broadly optimistic about the summit, but said a variety of brokers would be needed to ensure a range of views are heard.

Jonathan Miller, director at 365ifa, said: “For this summit to be successful, the conversations need to be with independent brokers, ranging from small to large. Corporates and trade bodies are too far removed from the coal face to have meaningful input.

“Are people who haven’t been in front of a client for 10-15 years the people that can provide the feedback Rachel and Lisa seek in such times? In my opinion, no. They need to know how individuals are coping and accepting the current rates being thrust upon them. This can only be provided by those giving the advice.”

Jamie Lennox, director at Dimora Mortgages said: “Real brokers on the ground level need to be the voice of the next generation of homeowners as they see and understand the struggles being faced by many first-time buyers.

“There needs to be some real thought around getting builders to build. The planning process is long and slow and needs to be reshaped. We then need to look at a viable scheme to replace Help to Buy, which has left a gaping hole in the market.”


Bank of England policy, lender support and broker charter should be discussion points

Brokers added that they would want to ask Reeves and Nandy about the Bank of England’s approach to the base rate and inflation, as well as what further lender support can be offered.

Rhys Schofield said he would want to ask what actions could be taken for clients who cannot afford new payments.

“Options like a stamp duty holiday for people downsizing, or a six-month payment holiday whilst they do so. Both the public and brokers are pretty darn resourceful and we could help a lot of people in a pickle with a few more tools in our arsenal.

“Making people’s lives easier doesn’t actually have to cost too much money,” he said.

Justin Moy, managing director at EHF Mortgages, added: “I would discuss the role of the Bank of England in setting rates, and the lack of tools they have around ways to curb inflation.

“If we adopted a more European model of long-term rates, the base rate becomes redundant, so how else would the government and Bank of England control inflation? Would increasing spending taxes, like VAT, be a better way to control inflation, and spread the responsibility to everyone, not the minority?”

Rob Gill, managing director at Altura Mortgage Finance, suggested that there should be a mortgage broker charter that would complement the current lender version.

He explained: “Brokers are very much on the front line and are seen as trusted advisers by many clients, often the first call for any borrower with questions or concerns.

“A mortgage broker charter, clarifying and publicising what brokers do, and complementing the lender version already up and running, should be among the discussion points.”

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