Meeting of the Parliament 23 November 2022
I fully accept that there is a review, and I will come on to talk about that in a minute. However, in that case, and given that the review has been going on since the summer, I suggest that it should be fairly simple for the Government to accept our proposals and expand that safety net. We propose that the mortgage to shared equity scheme be overhauled—it needs to be overhauled urgently—to deliver a true safety net for those who are at risk of losing their homes amidst the Tory economic crisis. When circumstances change, so must the policy, and those circumstances have most definitely changed. Ask anyone out there and you will find out how stretched family budgets are.
As an absolute minimum, the overhaul needs to cater to a wider group in today’s market. You would be hard pressed to find a single property in the Lothians, the Highlands or rural Scotland—the areas with the highest price-to-income ratios—that could get help under the scheme. First, property value thresholds must rise. The Government’s existing thresholds, which are based on house size, are complex. If they cannot be revised quickly, the scheme should instead rely on median house price data for each local authority.
Secondly, the equity requirements exclude far too many. The minimum of 20 per cent means that just 58 per cent of mortgages would be eligible. A revised scheme must ensure that recent first-time buyers who have far less equity and who might be rolling off their very first fixed rate can still access support.
Thirdly, the scheme must be resourced to be responsive and turn around applications in two months, not years. People have already lost their home by that time.