LONDON: Prime Minister David Cameron announced this afternoon that buyers of new homes will be able to borrow up to 95% of their value as part of plans to help 'get Britain building' once again.
The strategy forms part of a wider programme to build more homes and boost home ownership. A mortgage indemnity scheme, underwritten by the Government will remove the risk to lenders and, it was said, could help up to 100 000 people in England.
It will, said Mr Cameron, "tackle the housing shortage, boost the economy, create jobs and give people the opportunity to get on the housing ladder."
The Government's housing strategy will make some headway in addressing the massive shortfall in levels of new housing, according to the Construction Products Association.
Noble Francis, the CPA's economics director, said: "The mortgage indemnity scheme is certainly the main highlight of today's housing strategy. However, other key announcements, including the £400m 'Get Britain Building' pot for stalled building sites, lack detail as it is unclear where this funding will be coming from and how it will be implemented.<
"The proposals surrounding the 'Right to Buy' scheme are interesting but unfortunately are not likely to have an impact in the short to medium- term as the Government has made clear its intention to consult before moving forward," Mr Francis said.
At present, government itself estimates that more than 260 000 households will be created each year over the next two decades, yet housing supply remains at less than half this figure.<
"Although the measures announced today are a welcome attempt at addressing the failing housing market, much more needs to be done," Mr Francis concluded.
The main elements are of the Government's strategy include:
A mortgage guarantee scheme to encourage lenders to offer 95% mortgages to buyers of new homes.
Changes to the rules so that the money from the sale of council houses will go towards the building of new council homes.
An increase in subsidies for councils that take over neglected homes which have been left empty for a long time.
An increase in the subsidy available to developers under the 'Affordable Homes Programme'.