Three Budget ideas from CML

26 March 2009

CML logo

The Council of Mortgage Lenders (CML) today called on the Government to introduce three simple measures in the Budget to kick start the housing market.

Shelter chief executive Adam Sampson broadly welcomed the proposals, but underlined that the CML and lenders also have a responsibility to help struggling homeowners. 

The CML proposed:

  • Extending and simplifying low-cost homeownership schemes
  • Reforming stamp duty
  • Offering greater support to homeowners who get into difficulties.

Extending and simplifying low cost homeownership schemes

The group said extending low-cost homeownership schemes could increase demand in the housing market, help underpin house prices, and target the current glut of newly-built properties.

But it said there were currently too many schemes, they’re expensive to run and the complexity was putting lenders and buyers off.

The CML is calling for the number of schemes to be simplified and reduced, with more long-term funding commitments to help increase lending levels.

Reforming stamp duty

The CML also wants the Government to increase the threshold at which stamp duty kicks in from its current level of £175,000 to £250,000, and abolish all the higher rates, so that there is a flat rate of 1% for all properties.

Offering greater support to homeowners who get into difficulties

Finally, the CML wants the Government to introduce better state support for borrowers who get into difficulties, and to increase access to Income Support for Mortgage Interest (ISMI) and mortgage rescue schemes.

Shelter chief executive Adam Sampson said:

‘With the number of repossession expected to rise to 75,000 this year, the CML is right to call for better state support for struggling homeowners.

‘The current Income Support for Mortgage Interest (ISM) is limited in the number of people that it helps and those that do qualify can still see a shortfall on their mortgage interest payments.

‘While Government action is crucial, the CML and lenders also have a huge responsibility to work closely with struggling homeowners and do everything they can to find solutions and avoid repossessing people’s homes.’