Hon Chris Carter
Minister of Housing

14 August 2006 Media Statement

Heatley mean spirited about first homeownership

National MP Phil Heatley has completely missed the point in arguing the Welcome Home Loan scheme drives people into debt, Housing Minister Chris Carter said today.

"It may be news to Mr Heatley but a house is an asset, and homeownership has been the primary way most New Zealand families have increased their wealth," Mr Carter said.

"To argue that the government is driving people into debt by assisting first home buyers to get on the property ladder is to completely ignore all of the safeguards the Welcome Home Loan scheme contains to ensure people only borrow what they can afford.

"The scheme is specifically designed for those who can meet mortgage repayments but cannot get a mortgage under traditional lending criteria because they do not have a sufficiently large deposit," Mr Carter said.

"Thousands of young families have been stuck in an impossible cycle where they scrimp and save for years to pull together a deposit on a home, only to find that house prices have moved again, and they need an even larger deposit.

"Under the Welcome Home Loan scheme, households like these are given a hand-up into the market. They are screened by banks in the same way all other borrowers are to ensure they can afford to take on a loan. Their borrowings are restricted by their income under the scheme, just like everybody else," Mr Carter said.

"So far, none of 1850 families that have taken up Welcome Home loans have defaulted on their mortgages. These are honest, responsible Kiwi families who deserve a shot at homeownership, and the greater prosperity it can bring, just like everyone else.

"Mr Heatley's mean spirited attacks on them and on the Welcome Home Loan scheme only underscore how out of touch he is with the community, and the difficulties young people face."

ENDS

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