Lending controls 'no help for home buyers'
Thursday 28 Feb 2013 1:39 p.m.
Reserve Bank proposals to restrict the amount of money banks can lend for mortgages could make it even more difficult for people to buy homes, Labour says.
Finance Minister Bill English said on Wednesday the bank was considering restricting high loan-to-value ratio lending to control the housing boom.
Labour's housing spokesman, Phil Twyford, says Mr English doesn't understand the problems home buyers face.
"There simply aren't enough modest, affordable homes and the new Reserve Bank rules could require buyers to put up a bigger deposit," he said on Thursday.
"Depending on the design, that could create another hurdle to leap over."
The party's finance spokesman, David Parker, says similar loan limits are used in other countries.
"One option used overseas is to exempt first home buyers from the rules, or allow them to put up a smaller deposit," he said.
"Bill English is doing half the job... he risks making it harder for first home buyers without the benefits of creating better jobs and higher wages."
The Reserve Bank is going to issue a discussion paper on its proposals within a fortnight.
The MPs say the proposals make building affordable homes even more important.
Labour's policy is to build 100,000 homes in 10 years costing about $300,000 each.
The government says it can't be done.