PHOTO: Home Loans. FILE
The impact of tough new lending rules on New Zealanders ability to borrow has been revealed.
One in five home loans are now being declined and a third of consumer finance applications rejected, according to the credit bureau, Centrix.
Banks are now more cautious since becoming legally liable for irresponsible lending.
The changes to the Credit Contract and Consumer Finance Act (CCCFA) also require them to take a deeper dive into people’s spending habits.
It was designed to target predatory lending but in practice it’s having wider implications.
Before the rules came into force on December 1, 30,000 home loans were approved on average every month.
But now it’s down to 23,000, wiping nearly $2 billion off the amount banks lend each month.
The managing director of mortgage broker Squirrel Mortgages, John Bolton, said it’s hitting the housing market.
“It’s making it slower, harder, a lot more paperwork. But the risk is it’s going to lock first home buyers out of the market, it’s going to get a lot harder for older people to borrow,” said Bolton.
He said it was “dangerous” for the economy and has started a petition to get the regulations urgently reworked.
READ MORE VIA 1 NEWS
- Abandoned land for sale
- 8 former churches for sale
- Beach becomes popular spot for first-time nudists
- Tesla’s new tiny house for sustainable living | WATCH
- 2022 will bring ‘best chance of getting a property bargain in years’
- New Zealand named in top 10 most expensive countries to buy a house in
- Jacinda Ardern’s wedding to be at billionaire’s homestead
- Applying for a home loan? Your weekly takeaways could get in the way
- Average asking price hits 14-year high
- Julia Roberts’ stunning $8.3M San Francisco home