23 January 2004
The Welsh Assembly may have discovered how to break the log-jam preventing pensioners from releasing equity in their homes for renovation purposes.
Talks have been held in Cardiff about setting up a Welsh Home Improvement Lending Agency, which would act as a bridge between the money markets and individual home-owners who need no more than perhaps £2,000 to repair a leaking roof.
The agency is understood to be the brainchild of civil servant John Bader, director of social justice and regeneration, and his officials.
It has been welcomed by the Council of Mortgage Lenders (CML) and is being enthusiastically praised by members of the Assembly's social justice committee in their policy review on meeting the housing needs of older people.
Committee expert adviser Nigel Appleton pinpointed the problem as 'lack of fit between products and potential market: the minimum value of property threshold is too high, draw-down levels are too inflexible, and administrative expenses of setting up a loan are too costly'.
The committee is focusing on how to help poorer and older owner-occupiers. Appleton said their properties would be worth too little to be able to access current commercial products.
CML's Jackie Bennett added that such products might charge £1,000 to set up a small loan. 'It is not good value for either party,' she said.
Ian Smith of the CML in Wales said commercial sources of funds would not want to deal with 22 Welsh local authorities, each with their own administrative systems.
The agency, he said, would be run by the Assembly, and could take charge of distributing funds to the councils for onward lending.
PFjan2004
