The government is to announce plans to allow first time buyers the chance to borrow up to 95% of the property value.
Under the new ‘Housing Strategy’ the coalition plans to tackle the UK’s affordable homes shortage.
The aim is to kick start the gloomy housing market, which is experiencing the lowest level of new builds since the 1920s.
In a forward statement to the governments new housing strategy, David Cameron and Nick Clegg said, “ The housing market is one of the biggest victims of the credit crunch: lenders won’t lend, so builders can’t build and buyers can’t buy.”
“That lack of confidence is visible in derelict building sites and endless For Sale signs. It is doing huge damage to our economy and our society, so it is right for government to step in and take bold action to unblock the market.”
The cost of rent is now at a record high and mortgage lending is restricted as the banks ask for larger deposits. Struggling first time buyers will now be given some relief by the government as the new scheme plans to provide 95% of loan to value mortgages for new build properties in England.
Under the new proposals, homebuyers will be able to secure a loan on newly built homes with just a 5% deposit.
Without affordable housing and the mounting pressures in the private rented sector, the average age of a FTB is continuing to increase. The government believes that by 2033, 60% of projected growth in households will be aged 65 and older.
The new scheme also includes plans to invest £400 million to the ‘Get Britain Building ’ fund, providing finance to builders and developers to take forward housing projects that meet the right criteria.
The plan aims to create 32,000 new jobs by building around 16,00 new homes. Local authorities can expect to receive cash incentives for brining back empty properties into use.
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