Government to help first-time buyers onto property ladder
Monday, 21 November 2011 09:57
The government is to announce plans to help first-time buyers gain entry onto the property market today.
The plan will allow potential homeowners to borrow up to 95 per cent of the funds required with the government providing security for some of the risk.
The government has said that building the new homes required for England’s growing population is a priority.
The move is also designed to support the construction industry and to deal with the lack of affordable homes in England. The policy initiative is set to include a £400 million fund that will be used to get existing schemes that are already set up, off the ground. Many planned schemes had to be shelved because of financing problems but the new scheme aims to get these schemes up and running.
The scheme will start in July and it is hoped that 16,000 new homes will be built, creating 32,000 jobs. The coalition government housing minister, Grant Shapps says the aim is to make it easier for first-time buyers to get on the property ladder.
The number of new homes being built is at its lowest level since the Second World War. The difficulty in accessing finance and getting a mortgage is threatening to consign a generation to having little chance of ever owning their own home.
This means that the average age of a first-time buyer in 2011 has risen to 43, according to recent research. It means the cost of renting has moved to a record high of £718 a month.
Find out more: A guide to guarantor mortgages for first-time buyers
Just 121,000 new homes were brought to the market in 2010-11, a drop of six per cent on 2009-10 and the effect of the recession and financial difficulties facing the UK over the last few years has hit demand as people are discouraged from making major economic decisions at a time of continued economic uncertainty, concerns about job security and low consumer confidence.
A “Get Britain Building Fund” will be created that will allow developers to compete for funding for schemes that can be completed including some focusing on affordable homes. Initial plans are expected to focus on developing homes on public-owned brownfield sites. The report says that initial expectations are that 450,000 mainly affordable homes will be built by 2015.
One important part of the new scheme will be to allow tenants in social housing to buy their own homes at a discount with the funds being used to build more affordable housing.
Introducing the new strategy, the Prime Minister, David Cameron said that the UK has a situation with regard to housing where "lenders won't lend, so builders can't build and buyers can't buy".
Mr Cameron is expected to detail the plans in a speech to the CBI at their annual conference this week.
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