Jump to content
House Price Crash Forum
Sign in to follow this  
cashinmattress

Banks Turn Away £1bn Of Due To “prejudice” Against Low Cost Housing

Recommended Posts

Banks turn away £1bn of due to “prejudice” against low cost housing

Banks are turning away more than £1bn of mortgage business because they are refusing to lend to people on moderate incomes wanting to buy shared ownership homes, it was claimed by the National Housing Federation (NHF).

The National Housing Federation, which represents England’s housing associations, says many banks are refusing to lend to first time buyers and key workers – because they mistakenly view deals for shared ownership housing as potentially sub-prime.

The Federation estimates that during 2008/9, the banks turned away up to £500m of valid business on shared ownership products – resulting in 9,000 low cost homes being left vacant, even though around 90,000 households had expressed an interest in moving into them.

It is feared the banks will turn away the same amount of potential business this year – leaving thousands of first time buyers and key workers without the chance to buy their own low cost home.

The Government, which has poured tens of millions of pounds into the properties, must now ensure that the state owned and partially state owned banks take on a greater social responsibility and make lending on shared ownership homes a key priority, the Federation said.

Although the demand for shared ownership homes is soaring – as the recession continues and repossessions rise – the banks are being increasingly cautious, with many taking the view that because shared ownership is designed for people from lower income brackets they are more risky than other types of lending.

The Federation says that the prejudice of the banks is not borne out by fact – as households purchasing low cost homes are no more likely to default on their mortgages than others.

The organisation calculates that if the banks started to lend on shared ownership products again there would be up to £1.5bn of business available to them in 2009/10 – with up to £480m required to finance mortgages for the 9,000 vacant low cost homes, and £1bn required for mortgages for the 15,000 low cost homes to be built this financial year.

Federation chief executive David Orr said: “The excessive risk-taking of the banking sector, that heralded the downturn, has been replaced by excessive caution.

“Lenders are now reluctant to provide mortgages for shared ownership, because of a prejudiced assumption that its buyers – people on low and moderate incomes – are more likely to default on their mortgages.

“As a result, thousands of lower income households, with a good credit rating, are being denied the opportunity to part-buy decent homes.

He added: “The Government should ensure the banks that have been bailed out with public money, such as Northern Rock, Lloyds TSB, RBS and Bradford and Bingley, take on a social purpose and lend to people on low-to-moderate incomes who can afford to buy shared ownership homes.”

Fvcking kunts? Or a moral bunch?

Don't matter. It's bear food! Crash on!

Grizzly%20Bear%20Roaring.jpg

Share this post


Link to post
Share on other sites

If the low income folk who are the target of this scam have any sense, they will thank the banks for saving them from one of the most imbecilic decisions they could make in their lives.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   291 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.