No simple quick fix for first time buyers

Date:

Wednesday 16th February 2011

Housing minister Grant Shapps held a First Time Buyers Summit yesterday to talk about new ways to help first time buyers gain a crucial first step on the housing ladder.

The event was attended by various leading members of the property industry, including new home developers, mortgage lenders and bankers, as the government aims to put more pressure on mortgage lenders to make more mortgages available to first time buyers.

The participants at the meeting discussed a number of significant issues including the need for a rapid resolution to the Mortgage Market Review being undertaken by the FSA; the important role government can play in brokering a Mortgage Indemnity Insurance schemes; the potential of further shared equity products; and the use of the assets of public agencies to unlock capital.

Michael Coogan, director general of the Council of Mortgage Lenders, said: "It is good to see ministers taking the initiative to discuss how we can look to improve market conditions for first-time buyers. But no one will be surprised to learn that there is no simple quick fix for a market that has changed fundamentally since the credit crunch."

With the average age of first-time buyers rising to 37, and a growing number of would-be homeowners unable to buy a new home, the Summit "was a welcome step forward", according to Stewart Baseley, executive chairman, Home Builders Federation

Baseley said: "The meeting was productive and positive. Solving the problem of first time buyer access to mortgages is absolutely critical to solving the housing crisis in this country.

"We know there is a huge pent up demand that is not being met because of the large deposits currently being required by lenders and this is having a knock-on effect on housing supply currently running at record low levels."

"House builders have already introduced a range of initiatives [including affordable homes scheme] to assist buyers bridge the deposit gap, but clearly the scale of the issue demands more is done."