Reeves to cut financial red tape to boost homeownership
Red tape swept away in biggest financial regulation reforms in a decade to boost homeownership and put more money into people’s pockets through the government’s Plan for Change.
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Nationwide set to widen access to its ‘Helping Hand’ mortgage from Wednesday, supporting 10,000 extra first-time buyers thanks to Chancellor’s Leeds Reforms.
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Reeves: Benefits of a thriving finance sector will be felt all over Britain
The Chancellor is expected to announce the biggest set of reforms to financial regulation in a decade at a summit of top finance executives in Leeds today, as part of the government’s mission to kick start economic growth and support more first-time buyers.
Red tape holding back the competitiveness of the UK financial sector will be swept away under the Leeds Reforms, addressing long-standing industry complaints.
The changes will see Britain become the top destination for finance firms over the next decade, attracting inward investment from across the globe to create good, skilled jobs around the country.
Prospective homeowners will be given a leg up onto the housing ladder under the plans, with regulators acting on the Chancellor’s push to regulate for growth.
More mortgages will be available at over 4.5 times a buyer’s income following Bank of England recommendations that some banks and building societies offer more high loan-to-income mortgages – creating up to 36,000 additional mortgages for first-time buyers over the first year.
This change means that Nationwide will be able to make its popular ‘Helping Hand’ mortgage available to people with lower incomes. From Wednesday, eligible first-time buyers can apply for the mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000. This will support an additional 10,000 first-time buyers each year.
This comes alongside the creation of a permanent mortgage guarantee scheme, delivering on a Manifesto commitment and ensuring high loan-to-value mortgages continue to be available in times of uncertainty, as well as a review of Financial Conduct Authority lending rules that could allow a prospective buyers’ record of paying rent on time to show they can afford mortgage repayments.
The reforms will be unveiled in Leeds ahead of the Chancellor’s Mansion House speech this evening.
Speaking in the City of London, Chancellor of the Exchequer Rachel Reeves is expected to say:
This is the foundation of an economy, and a country, that is more active and more confident.
Where people and businesses look to the future and talk about hope about opportunity.
Assured of their own capability, and of the ability of our country to boldly face the challenges that lie ahead.
And certain of the prize if they succeed.
Of higher wages and higher living standards.
The renewal of Britain in every home and every high street.
To put it simply: a Britain that is better off.
She will add on homeownership:
I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending, which the PRA and FCA are implementing immediately.
With an instant impact for consumers, such as Nationwide offering its ‘Helping Hand’ mortgage to more first time-buyers – supporting an additional 10,000 each year.
She will conclude:
Today, I have placed financial services at the heart of the government’s growth mission.
Recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving.
And I have been clear on the benefits that that will drive.
With a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people.