Headline: First home buyers already taking the hit for National’s inaction
First home buyers are getting squeezed even before the Reserve Bank announces expected limits to low-deposit home mortgage lending, says Labour’s Housing spokesperson Phil Twyford.
Today’s home loan affordability report by Roost Mortgage Brokers shows banks are toughening lending criteria and applying penalty interest rates for low deposit borrowers. This is against a backdrop of worsening housing affordability in the main centres.
“The Government is refusing to comment on the Reserve Bank’s widely tipped announcement of limits on high Loan to Value Ratio lending. It is creating a vacuum and the banks have started tightening up in a way that is going to hurt low to middle income first home buyers.
“The Government needs to front up and tell first home buyers what is going on. It is not fair to leave them in the dark.
“The Roost report for June also confirms housing affordability has worsened across most of the country and remains at its worst in Auckland, Christchurch and Wellington. That this is happening when low demand in the economy has interest rates at record lows shows just how much the housing market is overheating.
“National’s mismanagement of its housing policy means things are going to get even tougher for Kiwis looking to get into the housing market. National is siding with speculators, not first home buyers. It has ignored calls from the IMF, OECD and Labour to introduce a Capital Gains Tax to deal with speculators.
“National has also refused to deal with housing supply by rolling up its sleeves and building affordable homes as Labour will do. John Key doesn’t have a plan and his mismanagement has forced the Reserve Bank into a corner.
“Soaring house prices mean thousands of Kiwis won’t be able to scrape a 20 per cent deposit together. They can rightly blame John Key. Labour is calling for an interim exemption for first home buyers from LVRs until speculators are dealt with and supply issues fixed. That won’t happen under National.”
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