The Prime Minister’s promise to create two million more owner-occupiers by introducing five per cent mortgage deposits for first-time buyers has been welcomed by the LPDF.
The Government is keen to transform ‘Generation Rent’ into ‘Generation Buy’ and has announced a number of initiatives that could give young people the help they need to get a foot on the property ladder while also boosting the housebuilding sector, the LPDF said.
Boris Johnson confirmed plans to press ahead with the introduction of long-term, fixed-rate mortgages worth up to 95 per cent of the value of a home for first time buyers.The move would deliver the biggest expansion of home ownership since the Thatcher era 30 years ago.
He said it was “disgraceful” that levels of home ownership among under-40s had plummeted over recent years, forcing millions of people to “pay through the nose to rent a home, which they can’t truly love or make their own”.
He wanted to “fix our broken housing market” by building more homes and making mortgages more affordable, with long-term fixed-rate deals available on a five per cent deposit for first-time buyers.
In addition, the First Homes initiative also now being consulted upon, will add to the portfolio of housing opportunities available to first-time buyers and will provide an important stepping-stone to full owner occupation, provided they are seen as part of the overall affordable requirement.
The LPDF, whose members include land promoters, major house builders, planners and leading law firms, is working with the Government, local authorities and communities to enhance the planning process, and help deliver the new homes the UK needs.
LPDF chairman Paul Brocklehurst said: “For some time now the LPDF has been calling for action to help young people become homeowners. In recent months their dreams of owning their own homes have been hit particularly badly as prices have risen sharply and mortgage lenders have begun to demand much higher deposits.
“Let us be in no doubt that there is a crisis. The average house price has increased by 550% in 35 years. The price of that average home is now in excess of eight times average salaries, effectively doubling over that period, and is considerably more in certain areas.
“The average age of first time buyers has increased from 27 years to close to 35 years and, as a consequence, generations now feel they are excluded from owning their own home. This is yet another area of our society in which a generational injustice is manifesting itself.”
He added: “We welcome the fact that Government appears to have responded positively to a number of initiatives, contained in our Building a Recovery paper, with proposals to tackle this injustice. Improved access to high loan to value mortgages, handled responsibly, has the potential to help hundreds of thousands of young people.”
The housebuilding industry is critical to the national recovery, both economically and socially. Now, more than ever, the Government needs to ensure that the planning system can deliver on its target of 300,000 new homes being built each year by the mid-2020’s, added Paul.