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Eight out of 10 MPs believe more needs to be done to help first time buyers
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Three quarters of MPs believe that people with a |
- Three quarters of MPs believe that people with a stable income but without access to a large deposit should have access to mortgage finance
- 77% believe that home ownership is an important policy goal
London (10 March 2011) - A survey commissioned by specialist insurer Genworth Financial has found that a significant majority of MPs believe more must be done to help first time buyers. 83% stated that their constituents need more support, rising to 100% of those with constituencies in London.
Constituents finding access home ownership ‘impossible’
75% of those questioned by ComRes in January this year are told by constituents that it is impossible to get on the housing ladder, with those based in London disproportionately affected. This echoes the findings of Genworth’s ‘Barriers to Home Ownership Report’ issued towards the end of last year, which highlighted the ‘lost generation’ of home buyers by quantifying that, every year since 2007 around 100,000 first time buyers have been excluded from accessing home ownership.
The current difficulties faced by first time buyers are clearly seen as a real concern for MPs, with 77% believing that home ownership - for those who can afford it - is an important policy goal. This feeling was particularly strong amongst Conservative MPs (92%). Interestingly, the sentiment was lowest among London MPs (67%), perhaps indicating that home ownership is so far out of reach for many in the capital that other solutions need to be examined instead.
Impact on social mobility and wider economy
Looking towards the wider impact that the housing market has on the economy, more than four in five (84%) of the MPs questioned agreed that a more fluid housing market, stimulated by easier access for first time buyers, would help the overall financial situation and social mobility of their constituents. To this end, 75% stated that people with a stable income, but without the savings to put up a deposit of 10-20%, should have access to mortgage finance provided repayments are affordable.
What’s the solution?
These results reflect the concerns shared at the ‘emergency summit’ on first time buyers chaired by housing minister Grant Shapps on 15th February with a number of solutions discussed by industry stakeholders including Genworth Financial.
Angel Mas, president of Mortgage Insurance for Genworth Financial in Europe, commented: “The deposit remains the biggest barrier to homeownership in the UK, along with the prudent approach taken by lenders, who are allocating their scarce capital to other segments of the mortgage market.
“The return of high loan-to-value lending is vital if we are to unlock the market for those with a sound credit profile, but who are unable to save for a deposit in the near term. Lenders can participate safely in the high LTV segment by transferring default risk to a specialist insurer. This model creates additional safeguards for the overall system as insurers will only accept this risk if appropriate lending criteria are applied and monitored.
“We welcome the renewed focus on first time buyers and call upon policymakers to create the right incentives, through reduced capital requirements for those lenders taking a prudent approach by mitigating their default risk with mortgage insurance.
“This framework already exists in a number of other major economies which have withstood the economic crisis, with the flow of credit to prime first time buyers remaining open through the cycle. The urgency of this situation should point towards their example rather than looking for new and untested solutions.”
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For further information please contact:
Guy Genney
Genworth Financial
Guy.genney@genworth.com
+44 208 380 3786
Hollie Rendall
Teamspirit Public Relations
hrendall@teamspiritpr.com
0208 864 4135
Notes to editors
ComRes surveyed 150 MPs between 13th January and 7th February 2011.
OnePoll research: 2000 first time buyers were surveyed online in July 2010.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 global financial security company. Genworth has more than $100 billion in assets and employs approximately 6,500 people with a presence in more than 25 countries. Its products and services help meet the investment, protection, retirement and lifestyle needs of more than 15 million customers. Genworth operates through three segments: Retirement and Protection, International and U.S. Mortgage Insurance. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit Genworth.com. From time to time Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of Genworth.com.
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