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Partnership plan could improve on MPPI, says JRF

A partnership between government, lenders and borrowers would provide a cheaper alternative to mortgage payment protection insurance, according to the Joseph Rowntree Foundation.

In a new report, the social policy charity recommends the Sustainable Home Ownership Partnership scheme. But it’s not all good news for lenders.

The scheme’s insurance facility would cover 10 months’ worth of mortgage payments should borrowers face unemployment, sickness or have accidents.

The report suggests the cost of SHOP could be shared between government (25%), lenders (25%) and borrowers (50%).

To minimise the effect on public spending and ensure transparen-cy and accountability, the report recommends the scheme should be a joint venture between lenders and government.

This is seen as an incentive to lenders to lend more responsibly as they would have to contribute more if their possession rates were higher than average.

A housing tax credit would complement SHOP by providing assistance to home owners in low-paid work. This would support those who face a sharp drop in income without becoming unemployed and also make it easier for owners to move from SHOP into low-paid employment without facing a net reduction in their income.

The report also suggests that SHOP should be compulsory for all new borrowers and those who remortgage. While initial coverage would be limited, this would rise rapidly as new mortgages represent 10% of all mortgages.


Win some, lose some

Every cloud, it seems, has a silver lining. In Britannia’s case, the clouds built up in recent times when Neville Richardson, chief executive of the Britannia, had to oversee a senior management re-shuffle when Gerald Gregory, managing director of Britannia Capital Investments, was replac-ed by group finance director Phil Lee.

KRS and Teachers become partners

Teachers has entered the equity re-lease market via a partnership with Key Retirement Solutions.The mutual, which provides mortgages to employees in the education sector, says the partnership will mean it will refer clients to KRS.James Bawa, chief executive of Teachers, says: “We strive to offer our members a competitive range of products along with top […]

Regulator gets prosecutor status

Chancellor Alistair Darling is beefing up the Financial Services Authority’s power to tackle financial crime by awarding it specified prosecutor status. This will allow the regulator to offer immunity to informants providing details of criminal activities. Specified prosecutor status is already held by tax officials, the director of public prosecution and the Serious Fraud Office.

Halifax to launch FTB range on Monday

Halifax will launch on Monday a dedicated range of products for first-time buyers, quashing rumours that it was set to mirror First Direct and suspend lending. Products on the first-time buyer range will include a five-year fixed rate deal at 5.69% at 90% LTV.Although the UK’s biggest lender has also revealed that it will now […]

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Mothers missing out on millions

New HMRC figures show number of ‘mothers missing out on millions’ in pension rights has doubled in two years – Steve Webb Figures published on 24th March by HM Revenue & Customs show a doubling in the number of mothers missing out unnecessarily on vital pension rights because of a change in the rules on Child […]


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