Home' Trinidad and Tobago Guardian : September 21st 2014 Contents SBG4 NEWS
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt SEPTEMBER 21 • 2014
"The Government has embarked on a pro-
gramme of activities to construct new homes
in light of the more than 160,000 outstanding
applications from our citizens. We are also
rehabilitating and maintaining the existing
housing stock. We are committed to meeting
the public demand for housing over the course
of the next decade and we will do so through
an all-encompassing plan of action which
focuses on construction, rehabilitation, pro-
vision of land and subsidies for home improve-
"I propose to expand the existing 2.0 per
cent mortgage programme by increasing prop-
erty values from $625,000 to $850,000 and
increasing the combined monthly income of
households from $8,000 to $10,000 and to
supplement that programme by introducing
a new 5.0 per cent mortgage programme for
households with a combined monthly income
of greater than $10,000 and less than $30,000
toward accessing a mortgage of greater than
$850,000 but not exceeding $1.2 million, this
measure will benefit 26,100 applicants within
the HDC framework and a similar amount in
the private sector; and I propose to improve
the tax allowance from $18,000 to $25,000
per household, per annum on mortgage interest
paid in the year of income for first time home-
owners for five years, including those years
utilised by existing beneficiaries."
Finance Minister Larry Howai
Excerpt from the budget statement 2015.
In the very first issue of the Sunday
BG, we addressed what we termed
the "middle-class syndrome." This
is what appears to be the increasing
inability of this country s middle class
and middle income groups to afford
We shared the stories of John and Mary and
Michael and Sarah, two couples who were
looking for homes. John and Mary were an
educated, professional couple, living in a
$4,000 apartment in the West, while Michael
and Sarah, were spending $2,500 in rent while
waiting for word on an HDC apartment.
Even though John and Mary had a combined
income of $20,000 and Michael and Sarah,
one of $12,000, they both shared a similar
problem---the inability to access mortgages to
buy a home.
In our initial report, the Sunday BG sought
the views of housing stakeholders, such as
Ingrid Lashley, CEO of the T&T Mortgage
Finance Company (TTMF) and managing
director of the HDC, Jearlean John, on what
options were open to both couples.
Now, we have asked them to talk about the
new provisions made in this year s budget
which appears to open up new avenues to
accessing financing for home ownership for
those of middle class and middle income.
Q: How do you believe this will affect
the ability of middle class, middle income
homeowners to purchase homes?
Ingrid Lashley: While we are not yet privy
to all the terms and conditions of the proposed
2.0 per cent and 5.0 per cent programmes,
given the increase in qualifying income levels
and property values, it is anticipated that a
wider community will qualify for access to
Jearlean John: Middle class and middle
income earners will be impacted positively as
they will now enjoy increased "purchasing
power"; which gives greater access to more
housing options. homeownership is also made
significantly less onerous and more equitable.
Q: Are there any areas where these pro-
visions are unclear that you would like
to see addressed. For example, will this
new 5.0 per cent be administered by the
TTMF, or will commercial banks and
other mortgage offering entities be includ-
Ingrid Lashley: We await guidance from
our line Ministry in respect of the specific
application of the programmes.
However, as an "approved mortgage com-
pany" under the Housing Act and the admin-
istrator of the Government s 2.0 per cent mort-
gage programme, it is anticipated that TTMF
will be intimately involved in any extension
of the Government s affordable housing pro-
Jearlean John: These provisions will be
administered solely by TTMF at this time.
This could set the tone for other banks and
financial institutions to step up and be more
competitive in mortgage lending rates.
Q: Where did this figure of 26,100 mid-
dle-class applicants within the HDC
framework and the corresponding
amount within the private sector come
Ingrid Lashley: The statistics provided
are representative of applications to HDC
where the prospective homeowner earns in
excess of $8000---the current household limit
for the 2.0 per cent mortgage programme.
Private sector information is not as easily
collated but based on enquiries that we have
had from people in the income bracket of
$10K+, I can endorse the minister s position
that it is likely to be of at least similar amount.
Jearlean John: The HDC can only verify
what is reflected on the database of the Min-
istry of Housing and Urban Development.
(At the time of the writing of the article,
"Middle-class Syndrome" in April, John quoted
those of middle class and middle income to be
as much as 20 per cent of applicants to the
HDC which has been quoted by the Finance
Minister as numbering 160,000)
Q: What other arrangements/interven-
tions you believe the Government can make
to increase housing for the middle class,
middle income group?
Ingrid Lashley: Besides affordability and
the availability of financing, housing to the
middle income group is constrained by the avail-
ability of suitable properties that match that
The Government has attempted to ease this
burden by constructing appropriate units through
the HDC but their focus is on the lower to lower
middle income group by virtue of the social
needs of that group.
The private sector must now support this
initiative by expanding the availability of housing
units in the $850K to $1 million value band.
Incentives have also been provided to the con-
struction sector in this regard.
Jearlean John: In his 2013 budget presen-
tation, the Minister of Finance announced certain
amendments to the Income Tax Act Chap 75:01
which provided tax exemptions for traders in
newly constructed houses subject to certification
by the Minister of Housing, thus providing
strong incentives for the construction of houses
by the private sector.
The HDC has been working very closely with
the Ministry of Finance and the Ministry of
Housing and Urban Development with respect
to the implementation of a trader in houses
Additionally, we recommend the private sector
get more involved, not only in the construction
of private housing but also conceptualising,
financing, construction, marketing and sales.
Will the middle class finally
be able to access housing?
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