The 95% mortgages will be offered in an attempt to tackle the housing shortage and allow more people to get on the housing ladder.
By Tom Meade, Charles Reynolds and Richard Weston
First-time Merton house buyers have cause for optimism following the government’s mortgage scheme announcement yesterday.
The 95% mortgages will be offered in an attempt to tackle the housing shortage and allow more people to get on the housing ladder.
Single parent Lee Hill, 31, of Mitcham, is a first-time buyer and in favour of the proposed new scheme.
“I’ve got a young family, so I need all the help I can get,” he said.
“I don’t think the government have been doing anything so far. Given the state the economy is in, they’ve not done enough.”
David Cameron and Nick Clegg unveiled the scheme in Guildford with the hope of increasing activity in the housing market, for developers, buyers and mortgage lenders.
Since the American sub-prime mortgage crisis and the ensuing global economic meltdown, British lenders have required deposits ranging from between 20-25%.
Under the new proposal as little as 5% would now be required, making housing more affordable to first-time buyers.
Just over 121,000 new homes were made available in 2010-11, half the required amount according to government estimations, so understandably housing developers are in favour of the new scheme.
Steve Turner of the Home Builders Federation says first-time buyers struggling to get a mortgage is one of the biggest constraints on house building and therefore the scheme could only be a good thing.
“It’s an announcement that is very welcome,” he said.
“The current deposit size is not realistic for young people. This scheme would be much more realistic.”
Despite the widespread concern surrounding the difficulties for first-time buyers, an estate agent at Woollens, Wimbledon, thought the new scheme was unnecessary for the area.
