PM announces 5% deposit mortgage plans to create 'Generation Buy'
Speaking at the Conservative Party Conference, Prime Minister Boris Johnson announced plans to improve access to 5% deposit mortgages for first time buyers.
He said the plan would create 2 million more owner-occupiers in the UK.
Johnson has reportedly asked ministers to design the plan, which would involve removing stress tests for mortgage applicants, instead extending “a form of state guarantee” to lenders to de-risk the loans.
Speaking to the Telegraph yesterday, Johnson said:
“I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society. And we’re going to fix that – ‘Generation Buy’ is what we’re going for.
“We need mortgages that will help people really get on the housing ladder even if they have only a very small amount to pay by way of deposit, the 95% mortgages.
“I think it could be absolutely revolutionary, particularly for young people.”
Managing director of Barrows and Forrester, James Forrester, commented:
“Today’s announcement will no doubt excite a nation of aspirational homebuyers who have already been sent into a frenzy over the prospect of paying no stamp duty.
"However, for Boris Johnson to claim this will help fix our broken housing market is not only laughable but quite frankly an insult to those who find themselves priced out of homeownership.
"The cause of the dire situation we find ourselves in is the Government’s sustained failure to build enough affordable housing year in, year out.
"The inadequate supply of housing to meet demand is one of the driving factors that has caused house prices to spiral and to continue to mask this failure by further fuelling demand is irresponsible.
"Instead, their time would be better spent reallocating wrongly classified green belt land so it can be utilised for housing and preventing the big housebuilders from drip-feeding housing supply in order to keep their profits up.”
NB: Prosperity Wealth Ltd is in no way affiliated with any of the companies that we reference within this article.