Reeves pledges mortgage shake-up despite risk of surge in repossessions
As part of her Mansion House announcement, the Chancellor will hail the biggest mortgage shake-up in a decade to boost homeownership and cut red tape.
She is pressing ahead with the changes despite the head of the City watchdog warning just months ago that the push could 'go wrong' by resulting in a surge of repossessions.
Under the plans, renters who have a good track record of monthly payments will be able to use this to prove to lenders how much they can afford to borrow, sometimes without the need for a deposit.
Ms Reeves will also launch a permanent mortgage guarantee scheme to help more people get on the housing ladder.
The proposals will be announced on Tuesday in front of an audience of bankers and City officials, including Bank of England Governor Andrew Bailey.
It comes just days after Threadneedle Street announced it would relax lending rules for first-time buyers by changing a cap on the amount people can borrow.
The Bank said this would allow 36,000 more mortgages to be issued at high loan-to-income (LTI) levels per year.
Nationwide, Britain's biggest building society, has also cut the salary requirements for first-time buyers from £35,000 to £30,000, in a move it hopes will enable 10,000 more people to become homeowners.
While the plans promise to bolster homeownership, regulators have argued they are in direct contrast with a pledge by banks to help borrowers meet monthly mortgage payments.
Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), warned in January that 'things are going to go wrong' by relaxing regulation.
This was on the basis that 'not everybody is going to play completely by the rulebook', adding that more risk would ultimately increase the likelihood of repossessions.
'When the mortgage charter came in last year, pretty much every major party said keep repossessions down, and we did,' Mr Rathi said.
'That is not consistent with relaxing the lending standards.'
Ms Reeves, who is widely expected to launch another tax raid in the autumn, will insist on Tuesday that Labour is creating a country that is 'active and more confident' and a 'better-off' economy.
She will also claim that financial services is 'at the heart of the Government's growth mission ... recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving'.
However, Ms Reeves's annual Mansion House speech will not include details of a highly anticipated review of private sector pensions, which could result in workers and companies being forced to put aside more of their wages for retirement.
The review will instead be launched next week, alongside an assessment of the state pension age.
A series of reforms will also see the Bank of England review capital rules, while the senior managers regime that has for a decade forced senior executives to take personal responsibility for wrongdoing will also be made less onerous.
In addition, the FCA's flagship consumer duty rules will also be reviewed to ensure they are not hampering growth in investment banks and pension funds.
The City watchdog will also pare back rules to help companies list more quickly on the stock exchange amid an alarming exodus from the Square Mile.
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