First Time Buyers Unite
Powered by StepLadder
Here at StepLadder we’re passionate about helping people buy their first homes. In addition to running our Home Circles, we are working with policy makers and talking to MPs about how we can change the future for Generation Rent. Nobody should be trapped in a rent spiral, unable to get on the property ladder. Solutions and support should be available. We want to empower, educate and support First Time Buyers on their home ownership journey. We aim do this by influencing, challenging, and collaborating with policy makers to change policies to make the UK the easiest place in the world to realise the dream of home ownership.
On 19th September 2019 we hosted a roundtable event at the Houses of Parliament with Government, Local Authorities, Communities, Housing Associations, Think Tanks and Commercial Players in the housing market trying to improve the future for property ownership and empowering the First Time Buyer.
This event marks an important step for First Time Buyers uniting and working together to change the future of home ownership in the UK
Here's a quick summary of the key points from the meeting...
Renters pay, on average, 41% of their income on rent vs Homeowners who pay, on average only 19% of their income on mortgage repayments*.
*Ref: English Housing Survey 2016/17
Education from a young age is crucial. Awareness and understanding of savings and how to build your credit score are essential building blocks for a successful journey to home ownership.
Mortgage affordability methods need to be updated. Open banking features should be used to ensure lenders have a more accurate view of expenditure and affordability, rather than based on assumptions.
Employers should endorse deposit saving schemes as part of employee benefits or salary sacrifice options.
We have written an open letter to government to help move this agenda forward.
E.g. First Time Buyer friendly government incentive schemes that releases funds on exchange of contract.
E.g. Open Banking should be used to enhance accuracy and efficiency of mortgage affordability calculations.
Solutions from Abroad
E.g. Using collaborative saving models, such as ROSCAs, which are used around the world, these schemes should benefit from the same tax and regulatory framework.
Innovation in Finance
E.g. Mortgage lenders offering long-term, fixed rate products at a reasonable interest rate.
Our Open Letter to the Government
FIRST TIME HOME BUYERS UNITE
StepLadderhosted a roundtable discussion on “Tackling the Housing Crisis” on 19th September 2019, at the Grand Committee Room, Palace of Westminster. Given a well-reported range of steepening challenges to home ownership and corresponding collapse in home ownership rates, the emergence and anxiety of ‘Generation Rent’ is no surprise.
We brought together key people across the housing industry such as social action groups, housing associations, social media influencers, mortgage advisers and solicitors. We were joined by representatives from the Greater London Authority, Parliament and Government. Most importantly, we welcomed First Time Buyers (many already StepLaddermembers) facing the challenge of reaching that first rung on the property ladder.
Our goal together is to develop tactical, achievable changes to policy and regulation with direct positive impact for prospective first time home buyers. We know your Government shares this urgency of purpose.
Will this Government join us in supporting aspiring first time buyers by signing up to these points:
Fixing Policy (1):Modify the Lifetime and Help-to-Buy ISA to be released on Exchange, rather than on Completion. This savings scheme was designed for savers and the deposit portion of their home purchase, yet not available when first time buyers actually need to commit deposit funds.
Fixing Policy (2):Replace Help-to-Buy equity loans with a regulatory defined class of First-time-buyer mortgages, with corresponding supportive capital treatment, available for all those finally reaching the first rung of the property ladder.
Empower Technology (1):Enabling and promoting the integration of Open Banking for evaluating credit risk and responsibility. Mortgage finance, as an area of credit underwriting, is one of the most risk averse and slowest to embrace innovation, even in the face of evidently deficient methodologies widely in practice today.
Empower Technology (2):Making lender affordability responsive to life-cycles, not just looking at buyers’current income, but their future potential also. The insight from data and predictive power of modern finance should serve the first time buyers, and not just banks.
Adopt Innovation:We believe in collaborative finance. Our unique peer-to-peer productpairs social capital with individual financial capital and personal support. Accelerate uptake by extending the same salary sacrifice treatment as riskier investment initiatives and ring fence the regulatory treatment of intrinsically community-based finance.
Reform Mortgages:Mortgage finance should suit real home buyers and their budgets, rather than reflect consensus financing terms convenient for incumbents. The dearth of long-term fixed-rate mortgages in the UK best illustrates this market failure.
We welcome an on-going dialogue with policy makers, regulators and industry participants to shape implementation of the points above. However, the first time buyer must come first – if we are truly to remedy Generation Rent.
Thank you for your time, attention and action –
Lucy Mullins, Mihir Bhushan, and Matthew Addison
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