More families could own a share in their own home in the future
The enormous rise in property prices in the UK over recent years has resulted in many people being unable to afford to get onto the property ladder, which has caused much concern amongst struggling first time buyers. However, the Chancellor, Gordon Brown, has said that he plans to change this through the introduction of an increased number of shared equity properties, which could result in those that would otherwise be unable to afford a property being able to own a stake in their own home.
The government’s plans were announced earlier in the week, and the Chancellor aims to see the number of shared equity properties double over the next few years. The target of eighty thousand shared equity properties, which was set in 2005, has been doubled to a target of one hundred and sixty thousand shared equity properties by the year 2010, which is a one hundred percent increase over the space of three years.
The scheme is designed to help certain employee groups and low income workers to get their foot on to the property ladder. Currently, those looking to buy a property on the open market need to find a one hundred percent mortgage (or a lower percentage if they already have a lump sum to put down as a deposit). Under this scheme the buyer would only have to find a seventy five percent mortgage on the open market, with the remainder being made up of two equity loans, fifty percent of which would come from the government, and another fifty percent from the mortgage lender.
An official from the Royal Institute of Chartered Surveyors agreed that his type of move was needed, and he stated: "The decline in government sponsored housing over the last 20 years is the single most important factor in the affordability crisis for those in need." However, a spokesperson from the Council of Mortgage Lenders said that the proposals were "no substitute for tackling the main cause of affordability problems, which is the significant imbalance between housing supply and demand."
7th December 2006