By Matthew Kinlin
The government has felt the need to introduce a housing strategy to try and get the property market moving again.
The economic recession hit the property market hard. Property developments, schemes, and building projects, were left without funding and could not continue work. Lending confidence fell and many potential borrowers were unable to find funds.
This has led to a reduction of housing transactions and buyers have been forced into the rental market. This has led to rents escalating, whilst people remain priced out of the housing market.
The main points of the government’s housing scheme can be broken into five main points:
- A scheme that allows buyers to be able to secure 95% mortgages.
- A £400m investment fund that can help reignite developments that were stalled during the recession.
- Plans to increase the amount of discounts available for right to buy properties.
- To give £150m to help local councils bring empty houses back up to liveable standards.
- To alter tax rules so that it is easier for large companies to invest in buy-to-let properties.
The main purpose of the scheme is to introduce 95% mortgages, which will bring a much needed boost of people into the housing market.
According to the scheme, anyone from March 2012 will be able to apply for a mortgage of up to 95% of a property’s value. This includes all potential buyers, not just first-time buyers.
The only people unable to apply for the scheme are second homeowners and buy-to-let investors.
Some lenders do technically offer a 95% mortgage but hopefully the government scheme should increase competition amongst lenders and get them to offer better deals, which will allow a larger amount of new customers to join the housing market.