Nationwide’s homeownership Budget proposals
Ahead of the Spring Budget on Wednesday, Nationwide has made a list of proposals, including bringing back the Help to Buy ISA and reforming stamp duty.
The mutual said this as its latest house price index showed a first-time buyer raising a 20 per cent deposit would need to be earning 105 per cent of the average income, or £42,266 per year. It said the variation in affordability across the UK meant everyone had different pressures.
Nationwide has called for a government-commissioned independent review of the first-time buyer market to identify challenges. It also asked for an assessment of the gap between income growth and house price growth, the lack of housing supply, planning reforms and mortgage lending regulations.
Nationwide said stamp duty should be reformed as it discouraged people from moving. It added that this had a negative impact on the UK’s economy and resulted in the inefficient use of housing stock. Any reform should remove deterrents to buying a home or moving, Nationwide suggested.
The mutual proposed the re-introduction of the Help to Buy ISA with an increase to the amount that can be saved each month from £200 to £500 to reflect the higher house prices. It also said the redeemable bonus should be increased to match house prices.
Nationwide suggested allowing more lending at high loan-to-income (LTI) levels, saying its Helping Hand proposition, which launched in 2021, had “successfully tackled the affordability challenge”. This offering allows first-time buyers to borrow up to five-and-a-half times their salary on five- and 10-year fixed rate mortgages up to 95 per cent loan to value (LTV).
However, current restrictions require lenders to have no more than 15 per cent of these loans on its books.
Nationwide said increasing this cap would support more first-time buyers, especially those paying more in rent than they would be on a mortgage.
Henry Jordan, director of home at Nationwide, said: ‘‘The government must make homeownership accessible for more people. By starting with a cross-party review of the first-time buyer market and working cohesively with the industry to implement the best solutions, we can respond to today’s first-time buyer challenges.
“Nationwide is playing its part through our Helping Hand mortgage and could do more if the cap on high LTI lending was raised. To help the process, Nationwide has joined forces with the Building Societies Association and four of the UK’s largest building societies to produce a housing whitepaper this spring outlining the solutions we believe are needed to tackle the homeownership crisis.”
Lloyds suggests empty homes initiative
To mark this week’s Empty Homes Week, Lloyds Banking Group has asked the government to introduce a policy to repurpose long-term empty properties into “genuinely affordable homes”.
The group has asked for this to be introduced across England where there are nearly 250,000 empty residential properties, a 24 per cent rise since 2016.
Lloyds Banking Group said this “could be part of the solution in the short term for struggling councils”.
It also said the initiative could support a “proactive approach” to bring more long-term properties back into use to prevent and end homelessness.
David Cleary, managing director of housing at Lloyds Banking Group, said: “We have a chronic shortage of affordable, sustainable, and high-quality housing in the UK today. Lloyds Banking Group has partnered with Crisis and is jointly calling for one million more homes for social rent over the next decade to help overcome the shortage that is leaving hundreds of thousands of people trapped in homelessness.
“Repurposing empty homes into genuinely affordable homes for social rent could be part of the solution. We believe that the government should develop a National Empty Homes Initiative to bring more long-term empty properties back into use.”
