Star letter: Housing manifestos could do so much more
The general election is focusing on property this week and we are seeing commitments about shared ownership and Help to Buy to dovetail with the Budget announcements on new deposit Isas for first-time buyers. As ever, I am left feeling: “That’s great, but what more could be done?”
I would like to see a policy that waives stamp duty for anyone who downsizes their property. This would free up bottlenecks in the market and encourage the ladder to be used as a two-way tool. Just think how many people would be encouraged to move if the costs were not so prohibitive.
A more restrictive version worth considering would be to waive stamp duty for those over 70 instead. This would encourage more people to move in later life and not rattle around in houses that are too big and expensive to heat and light. Again, this would free up the property market and ease pressure on prices.
How would I pay for it? I would make all landlords register their tenancies online with HMRC, similar to how the Deposit Protection Service works. This would automatically create a tax bill for the rental income received, which the landlord would have to report on each year. At present, HMRC must miss out on millions of pounds in unpaid tax on rental income and this would tighten things up.
It could also be used to offer greater protection to tenants against eviction due to non-payment and help us keep the mortgage market clean of unofficial buy-to-lets, HMOs and so on.
Winfield for prime minister?
Robert Winfield, Chartwell Funding
A 16-year-old underwriter? Why
Yorkshire Building Society is planning to launch an apprenticeship scheme to train underwriters. A 16-year-old underwriting mortgages? Really? Most 16-year-olds I meet have no idea of what a mortgage even is.
I am all in favour of apprenticeships; it is far better to have two years’ work experience at 18 than to have two A Levels. But surely some jobs are not suitable.
One of the most valuable tools an underwriter has is life experience, which should result in common-sense decisions. That is not prevalent with most teenagers.
Good mortgage man
Need underwriters? Grow your own
A positive aspect of the MMR is the need for human involvement in the assessment of affordability, but finding someone who can do that is not as easy as it may seem. The ads for experienced underwriters show that finding a good one is tougher than ever.
The ‘computer says no’ method is getting antiquated because lenders have had to adjust the credit score upward and, as a consequence, are not getting the volumes they want.
To compensate, they now need skilled involvement. But that is not available and, as good underwriters are getting very expensive, what better way to address the situation than to ‘grow your own’?
Let clients think for themselves on IP
Last week, Mortgage Strategy reported on networks’ calls for lenders to make income protection compulsory in mortgage sales.
This is nonsense. Clients are adults and must make their own decision on whether to take out an IP policy or life cover.
We, of course, always recommend they consider taking out a policy to protect themselves. But what about clients who are unable to do so due to the nature of their job, their health or their BMI, which is becoming a real issue? We do not live in a nanny state.
Enforced protection isn’t the way ahead
Making IP compulsory in mortgage sales would be a nice idea if it was enforceable. But not only is conditional selling not TCF but it would not take much for a client to complete the mortgage one day and cancel the policy the next.
Enforced protection is not the way forward. Encourage clients to take protection and you are onto a more stable heading.
The other issue you face is that for clients whose health conditions stop them obtaining affordable terms, it would prevent adverse lives from getting mortgages. Again, far from TCF.
Such propositions need more thought and consideration but yes, something may need to be done.
Chris Hulme, Clayton Hulme