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Remember role for distribution

So is a Government-backed shared ownership scheme the answer to the SOS coming from potential first-time buyers priced out of the market?

Chancellor Gordon Brown, flush with an election success, if not quite flush with cash, is to offer a helping hand to FTBs.

Brown would like to see a million more homeowners than there were when Labour was first elected in 1997. Abbey suggests that the scheme in its current form could help around 100,000 families.

The Government says it will fund half the value of certain properties for those at the lower end of the market. The new homeowners will pay half a mortgage to a lender and rent to the Government of around 3 per cent on the remaining equity. The bias towards key workers has been removed.

Intriguingly, lenders are expected to decide who is not earning enough for a full mortgage. This will require something of an adjustment in thinking.

It is not clear just where the Government will get the money from but while many in the industry feel that the major problem is under-supply of housing stock, this is at least a welcome move, provided the Chancellor gets the details right.

One final issue is the role that brokers and mortgage IFAs will play. In many cases in the past, the Treasury’s instincts have been to leave out the middleman even when the middleman or woman plays an essential part in the market – its policy for pensions being a case in point and the Cat standard mortgage being another, with no procuration fee payable.

Let us hope that the Treasury does not leave distribution out of the equation this time. Grand designs rarely work without taking it into account.


Pension lessons from abroad

In April, the Association of British Insurers, published a fascinating paper, available on its website, entitled, UK Pension Reform – Lessons From Abroad?

29% Of workers not saving for retirement

Employer pension contrib-utions have increased in the past 12 months but almost one-third of workers are still not saving anything for their retirement, according to a survey by Origen.

Creating opportunity out of change

By Denise Wond, marketing manager The buy-to-let market has recently been the subject of a raft of tax changes, all of which make it a less profitable and less appealing proposition for investors. In response, we’ve seen a dip in demand for BTL mortgages and that’s bad news for many advisers who will now be looking […]


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