GOVERNMENT SETS OUT RANGE OF POLICIES TO SUPPORT HOME OWNERSHIP

The prime minister Boris Johnson made a series of announcements in respect of housing during a speech in Blackpool yesterday. The government’s proposals include extending the Right to Buy scheme to cover properties owned by housing associations, allowing housing benefits to be used to pay a mortgage rather than just rent and making changes to how ISA savings are treated for universal credit eligibility assessments. The government also said that it would launch a review of the mortgage market to help first time buyers access mortgage finance – the review will be led by an independent chair and will conclude in the autumn (Telegraph).

The Times reports that the review will look at schemes such as one in Canada that requires first-time buyers borrowing more than 80 per cent of a property’s value to take out insurance against defaulting, which is believed to have encouraged lending.

Various commentators said the government’s plans will need careful consideration and have to be supported by significant investment. Charles Roe, director of mortgages at UK Finance, said: “Firms are committed to lending responsibly with regulatory rules in place to ensure that mortgages are affordable – it will be important to carefully consider any changes to ensure they deliver good outcomes for customers throughout the life of the mortgage. We look forward to discussing the proposals and will continue working closely with the government to help more people get on to the housing ladder.” (Press Association).

BANK OF ENGLAND SAYS UK BANKS ARE NO LONGER TOO BIG TO FAIL

The Bank of England (BoE) has today published its first assessment of eight major UK banks’ preparations for resolution under the Resolvability Assessment Framework. The BoE said that if a major bank failed today it could do so “safely: remaining open and continuing to provide vital banking services to the economy” and that it would be investors who would bear the costs which overcomes the too big to fail problem.

NEWS IN BRIEF

The Financial Times reports that the chancellor Rishi Sunak has been accused of paying £11 billion too much in costs associated with servicing government debt. The claims are based on an assessment by the National Institute of Economic and Social Research.

The European Central Bank plans to raise interest rates next month for the first time since 2011 amid concerns over inflation levels (Guardian).

Nicola Sturgeon, Scotland’s first minister, is expected to publish a new document setting out plans for an independent Scotland next week (The Times).

Two more railway unions have announced plans to strike, adding to concerns about travel disruption over the summer months (Telegraph).

The Law Commission has recommended that companies be held criminally liable for fraud and computer misuse committed by senior executives (Times).