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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.


Landlords must prepare for tenant job losses

Landlord Assist, the nationwide tenant eviction and rent collection firm, is advising landlords to consider the impact of tenants who could lose their jobs due to the government cutbacks and to take preventative measures.


Sell homes to pay off debt, says CML

The Council of Mortgage Lenders says the government should encourage those in financial difficulty to sell their property in a bid to avoid long-term arrears. The trade body made a series of recommendations along with housing charity Shelter to minimise the number of repossessions. It wants the Department of Communities and Local Government working group […]


Interest-only rules could kill industry

The Council of Mortgage Lenders recently hit out at the Financial Services Authority’s interest-only proposals which could potentially see four million home buyers frozen out of the market. Although the proposals are designed to ensure banks and building societies lend responsibly there is no doubt they will have far-reaching consequences for banks and consumers. The […]

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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