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Funding boost for affordable new homes in London
The Mayor of London has announced his intention for millions of pounds of funding for two new schemes to help Londoners into affordable home ownership and accelerate the delivery of new homes. A shared ownership schemes will help people on low to medium incomes own a home with a boost of up to £180 million through the Mayor's First Steps Challenge Fund and £40 million goes to an innovative housing project where buyers need no deposit. The Fund aims to accelerate the delivery of 4,000 new homes between 2015 and 2020 and is being made available on a recoverable basis so that money can be reinvested to provide more opportunities for affordable home seekers, helping achieve the Mayor's aim of assisting 250,000 Londoners into low cost housing by 2025. The Mayor is also giving up to £40 million of loan finance to Gentoo's Genie for a new innovative housing product where buyers will need no deposit or mortgage to purchase their home and at the end of the agreement customers own 100% cent of the home outright. The scheme aims to deliver 2,000 new homes over the next 10 years, helping people who would struggle to save a large deposit for a mortgage. The Mayor has already made considerable efforts to help Londoners to own their own home with over 50,000 people expected to be helped into home ownership through his First Steps scheme over the course of his two Mayoral terms. He has also moved to remove red tape and bureaucracy in the application and purchase process, providing greater choice and flexibility for purchasers. Alongside steps to improve the mobility options available to existing purchasers of First Steps homes who need to move for family or employment reasons. The Mayor made the announcements as he visited Erith Parkin Bexley, a major new regeneration project, with 80% affordable rent and shared ownership homes. The Mayor joined two families who will be moving into shared ownership homes for their first visit to their new homes. He also met one of the residents of the former estate who moved into her new home in December. The transformation of Erith Park is being delivered by Orbit Group, in partnership with Wates Living Space, London Borough of Bexley and the local community. The Mayor has awarded the project £23 million from his affordable housing funding. The site was formerly known as the Larner Road estate, which originally had a large number of single occupancy flats and suffered from high crime levels, making it undesirable for many local families. The first part of the major regeneration project will deliver 343 new homes, including three and four bedroomed family homes with gardens, with a three bedroom shared ownership house costing approximately £240,000. Erith Park will provide a mix of homes for affordable rent, shared ownership and outright sale and will include 60 of the original households who have chosen to remain in the area. Phase 2 of the scheme will… Continue reading
CML voices concerns over European mortgage changes
The Council of Mortgage lenders has identified four main areas where a change of approach is needed to achieve minimum disruption to the UK mortgage market from European changes. In its response to the Financial Conduct Authority’s consultation on implementing the European Mortgage Credit Directive (MCD) in the UK, it says there are not sufficient measures to manage the transition to MCD rules. The submission says at present, there is no provision for ‘pipeline cases. Such a provision was crucial in the successful implementation of the Mortgage Market Review and the CML believes this approach should be replicated for the MCD. It also says that fundamental changes to the sales process that will confuse customers. The new requirement for a reflection period following a binding offer does not need to introduce a new step in the conveyancing process, as the current implementation proposal suggests. The CML says that the formal offer should be treated as the binding offer and this fully addresses the MCD requirements while minimising confusion. Another major issue is ensuring the MCD applies to new lending only. As currently drafted, the proposal is confusing and could be taken to apply to contract variations, which is not the intention. The FCA should make this explicit, says the CML report. The other concern is the disruptive definition of foreign currency loans. While the CML agrees with the objective of mitigating the risk of currency variation, the proposals apply too widely and the scope should be more narrowly defined. ‘The Directive provides little if any benefit to UK consumers or the operation of the market. We believe that both the government and the regulator share this view,’ said CML director general Paul Smee. ‘So, while we naturally recognise the need to comply, we believe that the UK should do so in a pragmatic way that disrupts the existing robust regulatory regime as little as possible,’ he added. Continue reading
