Headline: Govt got no advice on LVR impacts on first home buyers until a month too late
The Government didn’t consider the impact of LVR lending limits on first home buyers until a month after it had signed off an agreement giving the Reserve Bank the power to implement LVRs, says Labour’s Housing spokesperson Phil Twyford.
Finance Minister Bill English has confirmed in writing that he didn’t ask officials for advice on how the lending limits would affect first home buyers until June 15. The Government signed a memorandum of understanding giving the Reserve Bank the ability to use macro-prudential tools including LVRs on May 16.
“National is so out of touch with first home buyers it neglected to consider the impact LVRs would have on Kiwis trying to get onto the housing ladder, when everyone knows higher deposits would lock many out of the market,” says Phil Twyford.
“Bill English thought LVRs would be a quick-fix solution to the Auckland housing market and would mean he didn’t have to tackle the affordable housing shortage or clamp down on National’s property speculator friends.
“The Government has bungled this, and now they are panicking. The big four banks have all put their interest rates up, their bank charges are up, and they are charging low-deposit lenders a premium.
“No wonder the latest poll shows nearly 80% of first home buyers cannot afford the new 20% minimum deposit. They have been locked out of the housing market by this Government’s incompetence.
“After the announcement on LVRs John Key went around making all sorts of statements about wanting to protect first home buyers, and how he was talking to the Reserve Bank Governor about a carve out. It is clear now that he was crying crocodile tears.
“Bill English had already signed off the LVRs with the Reserve Bank with no exemption and didn’t bother to check what impact it would have on first home buyers until after the fact.
“Labour would have negotiated a temporary interim exemption for first home buyers while we fix the supply crisis with our KiwiBuild programme of building 100,000 affordable homes over 10 years and bring in a capital gains tax to ward off speculators,” says Phil Twyford.
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