CPS report backs Conservative Party’s long-term fixed rate mortgages

The Conservative party’s manifesto pledge to create a new market in long-term fixed rate mortgages has received the backing from a Centre for Policies Studies report.

The report, called ‘Resentful Renters’ by Graham Edwards of property company Telereal Trillium, suggested users won’t need to be stress tested and can be offered 95% LTV rates that were the norm before the financial crisis.

Edwards said: “Owning your own home is a near universal aspiration in the UK, yet owner occupation has been declining in recent years.

“I think we have an obligation to try to help the younger generation get on the property ladder. I hope that my proposals will help many people to do just that.”

The report said the problems began before 2008, because regulators responded to the financial crisis by making it far harder to get a mortgage. Average loan-to-value rates have fallen from 95% to 85%, tripling the required deposit.

Mortgage stress tests have made it harder to get a mortgage, while the rise of the buy-to-let market means that on a net basis every single new home built in the decade between 2005 and 2015 went to a landlord rather than a first-time buyer.

This has, Edwards said, created 3.6 million ‘Resentful Renters’ – people with secure earnings and good prospects who would have been able to become homeowners before the financial crisis, but are currently either renting or living with their families.