View more on these topics

Bottom marks for dumb FTB exam plan

A consumer charity poking its nose into the housing sector that it clearly doesn’t understand and calling for inappropriate overseas solutions is the last thing aspiring first-time buyers need right now


If proof were needed that many charity and quango chiefs inhabit a different planet to the rest of us last week marked a new low. The boss of a leading charity suggested that first-time buyers should sit an exam to assess their fitness to buy a home before they are allowed to proceed.

Malcolm Hurlston, chairman of the consumer charity with the catchy title of the Consumer Credit Counselling Service, in a speech called for mortgages to first-time buyers to be sold like driving licences, after a course of study and an exam.

He went on to criticise tax breaks and other incentives available to first-time buyers, stating that first-time mortgages should come with health warnings attached rather than pretty ribbons.

Hurlston points to the pre-mortgage counselling programme operated in the US, principally aimed at individuals on low incomes. As well as offering advice on buying a home this federal initiative offers low-cost advice on renting, repossession and credit issues. It has been expanding since the early 1990s.

In his speech Hurlston stated that the people most likely to get into trouble with their mortgages are those who have purchased a home too soon, although I’m not sure what this means. Anyway, he further qualified his remarks by adding those on low incomes into the high risk mix as he sees it. Genius.

Meanwhile, the Council of Mortgage Lenders says most people who get into trouble with their mortgages have suffered a change in their economic circumstances such as redundancy or divorce.

Encouraging first-time buyers to come back is key but making them sit an exam is not the way to do it

So once again we see an influential non-governmental body making recommendations while not in possession of the facts and viewing an overseas solution as a cure-all placebo that can be replicated in our market.

Unlike the US, mortgages sold in the UK are regulated and therefore subject to a high level of scrutiny.

Since 2007 the lack of mortgages available for first-time buyers coupled with the increase in deposits required – as well as the additional proof of affordability now demanded of all applicants – has effectively restricted first-time buyers’ access to the market.

This has resulted in more potential first-time buyers renting for longer – often well into their 20s and an increasing number into their 30s – before embarking on house purchase.

Innovation in the mortgage market is to be welcomed, especially at a time when we are seeing tentative green shoots in the property sector.

And first-time buyers are the life blood that feeds the housing market so encouraging them back is key to the revival of our industry. But making them take exams is hardly the way to do it. Back to the drawing board.



In the footsteps of the dictator

Industry gurus who went on record last Friday to suggest that a hung parliament may not be such a bad thing may well be eating their words as five days on after the general election the country is paralysed by political uncertainty

Leader: Parties must get it together

If the first 24 hours of a hung parliament were anything to go by, with the endless prevaricating and lack of decision-making, we could be in for a bumpy ride. Jittery financial markets feed on this type of indecision so hopefully by the time you read this the Conservatives and Liberal Democrats will have done […]

Details emerge about Mortgage Times’ debt

The extent of The Mortgage Times Group’s debts were revealed last week in documents filed at Com-panies House. The network, which went into administration on February 16, owed unsecured creditors more than £3.2m. Papers signed by the network’s director Paul Carmody on April 1 show it had assets of £378,500 that were made available to […]


News and expert analysis straight to your inbox

Sign up