Risk sharing the future for first time buyers

Speaking at today’s Council of Mortgage Lenders’ future housing conference Vennard said that the industry would have to assume that they’re right in thinking that first-time buyers were absolutely vital to the housing market and lenders will have to look at ways to mitigate risk.

He said: “We’re need to have a greater acceptance of shared ownership. As affordability gets to the pinch points as it is in London and the South East, we will get to that point where people can’t afford 100% ownership and we will have to go down the line of shared ownership.

“We’ve tried to straighten out the tangles in shared ownership and we need to find out whether shared ownership has the risks which commentators would lead us to believe."

Vennard told how Lloyds Banking Group had looked at the data and admitted that while the data wasn’t well seasoned, it was coming to a point where Lloyds was expecting to see signs of arrears and repossession coming in.

He said: “We’re not seeing that data now because you’ll find that in the first two to three years, people tend to cope however as you get further into terms of a mortgage, struggles will begin to come through and that’s when you tend to see patterns of arrears emerging.”