News: CML Demands Help for UK Housing Market

Mon, 30 Mar 09

The Council of Mortgage Lenders (CML) has called on the Government to introduce three simple measures in the Budget it believes will help the housing market recover.

The CML proposed extending and simplifying low-cost home ownership schemes; reforming stamp duty; and offering greater support to home owners who get into difficulties.

The group said extending low-cost home ownership schemes could increase demand in the housing market, help underpin house prices, and target the current glut of newly-built properties. But it said there were currently too many schemes, they’re expensive to run and the complexity was putting lenders and buyers off.

CML is calling for the number of schemes to be simplified and reduced, with more long-term funding commitments to help increase lending levels.

The CML also wants the Government to increase the threshold at which stamp duty kicks in from its current level of £175,000 to £250,000, and abolish all the higher rates, so that there is a flat rate of 1per cent for all properties.

Finally, CML wants the Government to introduce better state support for borrowers who get into difficulties, and to increase access to Income Support for Mortgage Interest (ISMI) and mortgage rescue schemes.

Shelter Chief Executive, Adam Sampson said, 'With the number of repossession expected to rise to 75,000 this year, the CML is right to call for better state support for struggling home owners.

'The current Income Support for Mortgage Interest (ISM) is limited in the number of people that it helps and those that do qualify can still see a shortfall on their mortgage interest payments.

'While Government action is crucial, the CML and lenders also have a huge responsibility to work closely with struggling home owners and do everything they can to find solutions and avoid repossessing people’s homes.'

The CML's proposals may prove too costly for an already cash strapped HM Treasury.

See also: House Prices and Trends

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