CBI says pensions should fund house buying

| November 11, 2011 | 0 Comments
CBI says pensions should fund house buying

The CBI is calling for a radical rethink in the way house purchases are funded including allowing buyers to dip into their pension pot for the deposit on their first home.

The number of first-time buyers fell from a high of 167,400 in 2001 to 36,200 in 2011 with unaffordable deposits and financial insecurity making it impossible for many people to take their first step onto the property ladder.

The CBI’s ‘Unfreezing the Housing Market’ report also calls for new mortgages to be introduced, tailored to allow homeowners in negative equity to move house.

The report claims that although five million people are “languishing on waiting lists” property sales have plummeted since the recession.

It sets out a number of proposals to boost the housing market including introducing a “Mortgage Indemnity Guarantee” insurance scheme.

This insurance fund would protect lenders from defaults on mortgage payments, giving them the confidence to offer low-deposit mortgages to first-time buyers.

The CBI also wants planning rules to be relaxed to help stimulate the housing market.

It wants commercial premises to be able to be converted to houses without the need for planning permission and is also calling for a review of Stamp Duty in order to make it more progressive.

John Cridland, CBI Director-General, said: “Housing makes a significant direct contribution to economic output and job creation, and also has a big impact on business and consumer confidence and spending.”

There was some good news for first-time buyers today with recent research showing that the number of 90 per cent mortgages on the market has increased significantly in the last two years.

New figures from Moneyfacts show that 84 mortgages at 90 per cent loan-to-value are available at present, while some building societies, including Skipton, Melton Mowbray and Cambridge are offering 95 per cent mortgages.

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