30 Sep 2013

Labour attacks LVR mortgage rules

8:10 pm on 30 September 2013

The Labour Party has paraded a would-be first-home buyer before the media today to show that new lending rules will unfairly lock them out of the market.

From tomorrow, banks will have to limit lending to people with low deposits to just one out of every 10 cases.

Kanik Mongia, 23, has spent the past four or five months hunting for a property in South Auckland or Mount Wellington.

He's saved enough for a 10% deposit, but now he says the rules will make it even tougher to find a house.

Labour's leader, David Cunliffe, says the Government has taken a sledgehammer to crack a nut.

He says, if elected, he'll direct the Reserve Bank to exempt first-home buyers from the rules.

But the Prime Minister, John Key, says while he would have preferred to do that, he could not overrule the Reserve Bank's independent decision.