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Affordable homes in South Lakeland could stand empty unless Government acts to force mortgage fairness

April 28, 2009 5:12 PM

Local MP Tim Farron today took his fight to protect the provision of affordable housing for local residents in South Lakeland to Parliament by tabling an Early Day Motion in the House of Commons calling on the Government to help first time buyers.

Mr Farron has spoken with local house builders to confirm that the current financial crisis has led to banks restricting mortgage lending for properties with local occupancy agreements and other affordability restrictions. Market-leading mortgage lender HBOS and other lenders, are insisting that borrowers chasing new-build properties provide a 20% deposit to obtain a mortgage, effectively pricing those seeking affordable housing out of the market.

Mr Farron has tabled an Early Day Motion in the House of Commons calling on the Government to instruct all mortgage lenders who have received a taxpayer funded bailout, to offer mortgages on affordable homes on the same basis as other properties.

Commenting Mr Farron said:

"Rural communities such as the South Lakes have worked tirelessly to encourage developers to engage in building affordable housing, but when mortgage lenders start demanding deposits of between 20-30% on a property worth £70,000, these houses become instantly unaffordable.

"With the taxpayer now holding a majority stake in many of the nation's biggest lenders, the Government is in position to step and instruct the mortgage lenders to lend to the people who need credit the most.

"This means making sure that the lenders aren't allowed to use the financial crisis as their excuse for hoarding taxpayer cash own and are required to offer mortgages on affordable homes on the same basis as other properties."

Tim Farron MP's Early Day Motion on Local Occupancy Agreements:

That this House notes with grave concern some banks and mortgage lenders are making it increasingly difficult for first time buyers to get mortgages on properties with local occupancy agreements and other affordability restrictions by asking for unaffordable deposits of 20% and upwards; calls upon the Government to help first time buyers by instructing those lenders who have received financial support from the Government to offer mortgages on affordable homes on the same basis as other properties.