13 June 2006
HANSON URGES LENDERS TO COME TO THE AID OF FIRST TIME BUYERS
Banks and building societies were today urged to look at new ways of helping first time buyers.
Speaking at the annual lunch of the Council of Mortgage Lenders, Social Development Minister David Hanson MP said: "I am asking mortgage lenders to look proactively at ways of assisting those potential first time buyers who are experiencing affordability problems and especially to help with the purchase through the Co-ownership scheme.
"I want all banks and building societies to consider lending to Co-ownership participants and to look at the need for Co-ownership participants to provide a deposit. House prices are rising so quickly that today's 100% mortgage in reality is, in 12 months time, a 75% mortgage. There needs to be an examination of these challenges."
Mr Hanson said: "Research has shown that if current trends continue, by 2025 only one in every three potential first time buyers in the 25 to 35 age bracket will actually be able to purchase a home. This has huge consequences as it will break the most vital link in the housing chain at the starter home end of the market and will have an inevitable knock on affect throughout the entire housing market. It is therefore in everyone's interest to ensure that first time buyers are helped."
Highlighting the success of the Co-ownership scheme, the Minister emphasised that shared equity schemes form the basis of measures to tackle affordability throughout the United Kingdom. He said that he had recently made changes to the scheme to make it more accessible for people on lower incomes.
"I am convinced that the trend of public sector/private sector/voluntary sector partnerships which is prevalent in the delivery of housing represents the most effective means of facing the challenges and building on the successes which have already been achieved", he said.
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