Phil Twyford
Housing Spokesperson

24th October 2013

Treasury told the Government that loan to value restrictions would hurt first home buyers

Treasury documents released today show that Treasury warned the Government loan to value ratio restrictions would have a massive impact on first home buyers.

“Treasury told the Government 6-8000 first home buyers would find themselves restricted by LVRs. Treasury also says that 40% of high LVR lending is to first home buyers and that 65% of first home buyers have high LVR loans” said Labour’s Housing spokesman Phil Twyford.

“Treasury also rubbished the Government’s pathetic attempt to look like they were doing something for first home buyers with their changes to KiwiSaver and Welcome Home Loans.

“They warned the Government that those measures may hurt it’s housing affordability objectives .They further argued it risked continuing the current house price growth, they ‘ question the value of the additional spending’, and that there was little evidence price caps needed to change and that it may reduce lending standards.

“In addition in documents released to Labour under the Official Information Act ,Treasury noted the Kiwisaver and Welcome Home Loan changes would advantage high income earners while disadvantaging low income earners currently served by the scheme and may affect less people than the Government claimed.

“Treasury also pointed out two of Labour’s key policies were options that could actually help the housing crisis, a capital gains tax and restricting purchases for offshore speculators.

“This shows yet again that after five years of inaction all the Government can do for first home buyers is offer them more restrictions and gimmicks while Labour offers real solutions.

“Labour will build 100,000 affordable homes and crack down on speculators through a capital gains tax .”

ENDS

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