CML: More flexible mortgage policies needed for the young

The Council of Mortgage Lenders (CML) has today stated that mortgage providers should be offering more flexible policies for young people trying to get on the property ladder.

According to the council, rising house prices, growing student debt and the will of young people to be active and mobile pose “fundamental questions” for lenders who are attempting to make home ownership more affordable for this group.

The CML concludes that the most effective policies will be those that allow young homebuyers to take on debt that is “prudent” in relation to their incomes and other financial obligations.

It also predicts that home ownership rates could continue to fall in the coming years, as getting on the property ladder becomes a slower and more difficult process.

“While home ownership remains a long-term aspiration for the majority, the reality is that for many young people the combination of house prices and student debt is reinforcing the lifestyle choice in favour of renting,” said Bob Pannell, head of research at the CML.

“The CML remains keen to explore new ways of getting first-time buyers onto the property ladder where possible.”

An Open Market Homebuy project is commencing in October this year which intends to make it easier for first-time buyers to purchase a house.

The scheme works by lenders contributing to a shared equity mortgage loan and the CML expressed its hope that it would be a platform for a more flexible approach to homebuying.