Mortgages  

More homes needed fast

More homes needed fast

The new Conservative government has been warned it needs to build more homes as a matter of urgency.

During the election campaign the Conservative Party committed itself to a revival of the 1980s Right to Buy scheme, this time for housing association tenants.

It has also promised to build more affordable homes, including 200,000 new starter homes for first-time buyers under 40 over the course of the next parliament, and a further 275,000 additional affordable homes by 2020.

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It also wants to extend the Help to Buy scheme, including the Help to Buy Isa savings scheme.

Council of Mortgage Lenders spokesman Sue Anderson said: “The next government will face major challenges in the housing sector. The challenges extend across tenures, and will have to be addressed by a government operating under significant fiscal constraints.”

Mark Hayward, managing director of the National Association of Estate Agents, expressed concern as to whether the government would be able to do enough, adding: “Supply and demand is a huge issue plaguing our country.”

Bob Young, chief executive of Fleet Mortgages, said: “We are all acutely aware of the overwhelming need to build more houses in the UK. However, the problem may be a lack of materials and manpower – many thousands of construction workers exited the industry back in 2008 and have not been replaced.”

Adviser view:

David Black, director of Hemel Hempstead-based DJB Research, said: “There are some seriously attractive mortgage deals available, but saving enough of a deposit remains a real issue for first-time buyers. There are high loan-to-value mortgages available but they have much higher interest rates.

“There seems little chance of an increase in the bank base rate any time soon, but prevailing sentiment on this can change quickly.”