More and more people dream of owning their own homes, but this can be very challenging to accomplish. What with the high prices for properties, the large deposit requirements, stamp duty and all the other associated costs, it is not an easy or quick job to save up enough to be able to afford to buy your own home. According to data from the Government, over 50% of renters could afford the monthly mortgage payments that they would need, but due to all the other constraints only 6% could access a typical first buyer mortgage.
The Government, however, is taking a look at this and is currently carrying out a major review of the housing and mortgage market, which it hopes to publish the details of in the Autumn of 2022.
So, what is the Government going to be looking at in this review?
- Tenants in housing association properties will be eligible to buy their properties outright, this will potentially benefit up to 2.5 million households. This would be achieved through an extension to the right to buy scheme.
- Reforming Universal Credit so that those who are in work but also receiving housing benefit can actually have their benefits paid towards a mortgage rather than automatically to a private landlord
- Reform of savings rules so that those on benefits who save specifically for a deposit will not have their Universal Credit reduced as currently happens when they have savings above £6,000. This will be achieved through the creation of an exemption to the savings rules for lifetime ISAs
- The Government has pledged to look at access to mortgages for first time buyers with the view of widening the supply of low cost, low deposit mortgages such as 95% mortgages which were heavily curtailed during the Covid pandemic.
Talking about the scheme, Boris Johnson said “We have a ludicrous situation whereby plenty of younger people could afford to make monthly mortgage payments – they’re earning enough to cover astronomical rent bills – but the ever-spiralling price of a house or flat has so inflated deposit requirements that saving even just 10 per cent is a wholly unrealistic proposition for them. First-time buyers are trying to hit a continually moving target. And of course, the global rise in the cost of living is only making life harder for savers. So, we want it to be easier to get a mortgage. Reporting back this Autumn [the review] will look at how we can give our nation of aspiring homeowners better access to low-deposit mortgages.”
This review should be good news for those who want to be homeowners and the details of the review, which are due out in the Autumn, will be an interesting read.
