FINANCE MATTERS
The ‘ new look ’ Finance Linked Individual Subsidy Programme
By the Banking Association South Africa ( BASA ), in collaboration with the National Department of Human Settlements
The National Department of Human Settlements and The Banking Association South Africa ( BASA ) recognise that a functioning residential property market offers an opportunity to expand the lending spectrum and increase levels of household investment in housing to achieve greater economies of scale .
This is because access to housing finance plays a critical role in enabling homeownership for most households . The policy reforms of the National Department of Human Settlements are now implementing the necessary shifts to respond to market needs by also concentrating on demand-side subsidy instruments within sub-segments of the Affordable Housing Market . This is aimed at broadening the reach of the subsidy instruments and deepening market penetration .
The remodelling of the Finance Linked Individual Subsidy Programme ( FLISP ) aims to ensure that the subsidy instrument is efficient , that it will achieve the intended redistributive policy objective and that it will have a positive impact on the overall affordable housing market . The FLISP policy adjustment is further premised on the recognition that the success of any subsidy programme depends on a subsidy delivery mechanism and administration system that is efficient , effective , and simple to implement .
The affordable housing segment of the property market is comparatively growing much faster and is more robust than the middle to upper market housing segments . Research studies have shown that low- and moderateincome earners are significantly constrained from accessing what is considered as affordable housing due to a lack of appropriately priced housing stock and rising house prices . Therefore , the State is mindful of the fact that a mortgage
WIKTOR KARKOCHA | UNSPLASH
4 MAY - JUNE 2021 SAAffordHousing saaffordablehousingmag SA Affordable Housing www . saaffordablehousing . co . za