PM: Financial institutions shutting low income earners out of homeownership

Government will overhaul Barbados’ land and mortgage systems by year-end in a sweeping push to expand homeownership and make housing more accessible to low-income earners, Prime Minister Mia Mottley has announced. 

“Before the end of this year, we must have the modernisation of how land is transferred and transacted within this country from mortgages, right back down,” Mottley said, outlining what she signalled would be a fundamental shift in how property is bought, sold and financed.

“The initiative is part of a broader strategy to “de-risk” mortgages and bring more Barbadians, particularly those historically shut out of the banking system, into homeownership. If you reduce the price of land and you reduce the price of construction, and you reduce the price of mortgages, then you reduce the price of property ultimately.

“When people have an ownership of the piece of the rock, they have a different relationship with the democracy that they live in,” she added.

Central to the plan is a rethinking of how financial institutions assess borrowers. 

The Prime Minister said government is pushing for “alternative credit assessments” and more flexible lending criteria. 

“Every set of circumstances is not the same,” she said, arguing that rigid, one-size-fits-all rules have unfairly excluded many potential homeowners.

“If that is appropriate for us to argue for the nation states of the world, it must be appropriate for us to argue for poor people in this country.”

Mottley also unveiled a vision for down payment assistance programmes, aimed at addressing one of the biggest barriers to homeownership. 

Under the proposed approach, government would effectively act as a patient partner, allowing buyers to repay assistance over an extended period.

“We recognise that sometimes part of the problem is that a man can pay the mortgage, but he doesn’t have the down payment.

“Instead of giving me $150 or $200 a month, give us $50 or $25 a month… we will take the second mortgage on the house, just to make sure that you don’t forget that we exist,” Mottley said, adding that other forms of security could also be considered.

The Prime Minister emphasised that these measures would be supported by “homeownership counseling and education” to ensure borrowers are equipped to manage their commitments.

At the same time, she warned that expanding access to housing must go hand in hand with strengthening the resilience of the island’s housing stock, particularly in the face of climate threats.

“My biggest nightmare… when a hurricane is called, I worry about the fact that Barbados can lose 50 to 60 per cent of its housing stock,” she said.

Mottley pointed to the need for improved building standards, particularly roofing. 

“This flat roof cannot work… all of us know what it is to see an old chattel house… with a gable roof… and the old chattel house is still standing,” she said, contrasting traditional designs with more vulnerable modern structures.

She said this was the main reason behind government’s continued push of its “Roof to Reefs Programme” to strengthen homes and infrastructure against extreme weather.

“It is because we have taken a temporary fix… and used it as a standard for 60 years… and we need to change that,” Mottley said. (TD)