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Social housing reform dangerous, say lenders

Buy-to-let lenders have hit out at the government’s changes to social housing, revealed in the Spending Review last week.

Chancellor George Osborne says that although terms for existing social housing tenants and their rent will be unchanged, new tenants will be offered intermediate rents at around 80% of the market rent.

Osborne forecasts this will save around £4.4bn and allow the building of up to 150,000 affordable homes over four years as part of the Decent Homes Programme.

But Nigel Terrington, chief executive of The Paragon Group of Companies, says the changes are dangerous and will strain the private sector.

He says: “The government has to be careful not to shift the role of housing people on low incomes on to the private rented sector without ensuring it has appropriate levels of support at both an economic and regulatory level.

“Failure to do so could be dan-gerous as it may lead to a shortage of rental property at a time of unprecedented tenant demand.”

And Alan Cleary, managing director of Precise Mortgages, warns there will be carnage if buy-to-let lending continues at the current low rate and says the government must provide a safety net.

He says: “The government must provide incentives for lenders to lend and for professional landlords to invest further in the sector.”

Osborne also revealed a perma-nent levy on bank balance sheets, expected to raise £2.5bn a year.

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