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Poverty Trap Snares Would-Be Home Owners

While paying 60% of their income on rent, many low income families are being refused mortgages because banks will not let them pay more than about 25% of income to buy a house, says Baptist Action’s City Mission manager Gary Corbett.

"That’s what we mean by the poverty trap. We’re pleased that Housing New Zealand properties are available to tenants but the reality is, many can’t do it," he said.

Mr Corbett was commenting on Housing New Zealand Minister Tony Ryall’s comments on increased house sales to low income HNZ tenants, particularly in Auckland, under the Home Buy scheme.

"We know of families in Orakei whose HNZ rent has increased so much, in line with the market rents policy, that they’re forced to move out of the community they’ve been a part of for decades," added Mr Corbett.

"These houses are on valuable land which is being sold to developers once the low income tenants have been forced out."

Mr Corbett added that it wasn’t unusual for some low income families to pay up to 80% of income on rent.

The Baptist City Mission provides budgeting management services to 170 low income and food parcels to 150 people a week.


ends

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