The Confederation of British Industry (CBI) recently came out in support of introducing more measures to help first-time buyers (FTBs) get on the property ladder in the UK. CBI director-general John Cridland stated: "We have to do more to give our young people hope in the future and support their aspirations to be homeowners." One of the suggestions made by the CBI in its Unfreezing the Housing Market report was to bring in a mortgage indemnity guarantee (MIG) insurance scheme - something which the government appears to have taken on board.
In the new housing strategy for England published on November 21st, ministers revealed that an MIG insurance initiative would be put in place for new-build properties, allowing mortgages with a loan-to-value of 95 per cent to be provided to FTBs. The Council of Mortgage Lenders (CML) and the Home Builders Federation (HBF) were the driving force behind the introduction such a financing solution. Commenting on the decision to follow CML and HBF recommendations, director-general at the CML Paul Smee said: "The scheme is good news for home buyers, developers and indeed the UK economy."
This is not the first time the CML has backed FTBs, though. Earlier this month, the organisation called on the government to extend the stamp duty exemption currently in place for those purchasing their first property beyond the March 2012 deadline. "FTBs need to get the message that the government supports them as they take their first steps into a housing market where confidence needs to be restored," Mr Smee asserted.
Highlighting the extent of the difficulties FTBs face, a study published by the HBF on November 18th revealed that those who want to get on the property ladder would need to save all their remaining money each month after paying their rent for four-and-a-half years in order to build up enough to afford a deposit. Stewart Baseley, executive chairman of the federation, described FTBs as "the lifeblood of the housing market". He added: "The lack of mortgage availability and the huge deposit gap are stifling a market already starved of supply."
- Monday 28 November 2011