Whatever you think of him, it’s fair to say it’s been a hell of a few months for Boris Johnson.
The British PM has found himself in hot water more than once. But for anybody with an interest in his mortgage and housing plans, there have been some interesting movements of late.
The UK government has made a commitment to help reverse what is currently a shrinking number of homeowners. A review and report are in the works, and will look at how to get more people into homes that they are able to say they own.
What is being planned?
Boris has made a commitment to engaging in a review of the mortgage market, with a view to enabling more people to own their own homes.
Boris has said: “We have a ludicrous situation whereby plenty of younger people could afford to make monthly mortgage payments – they’re earning enough to cover astronomical rent bills – but the ever-spiralling price of a house or flat has so inflated deposit requirements that saving even just 10% is a wholly unrealistic proposition for them.”
“First-time buyers are trying to hit a continually moving target,” Johnson added. “And of course the global rise in the cost of living is only making life harder for savers. So we want it to be easier to get a mortgage.”
It’s fair to say the dynamic as it currently exists is a peculiar one. People are spending plenty on monthly living costs including rent, but are not able to save the kind of money needed to buy a home of their own.
The latest review forms part of a series of commitments made by the Conservatives around housing in the UK. This includes an extension on Right to Buy, reforming the welfare system to turn ‘benefits into bricks’, and make it easier to access finance as a first time buyer.
A further promise covers the ‘unlocking of brownfield land’ and the removal of disincentives. The aim is to have 87% of people who want to own their own home supported in this ‘fundamental aspiration under this Conservative Government.’
What might the review uncover?
The kind of dynamic that Johnson has highlighted around rent and home ownership is certainly one that does not make a whole lot of sense as it currently stands.
The challenge is bringing about true change and genuinely enabling more people to buy their own home.
There are initiatives out there to support first-time buyers, with Help-to-Buy, First Homes and Deposit Unlock all names you may be familiar with. But the declining home ownership rate shows that despite all the will in the world, something isn’t quite working.
It may be that the issue is not so much with the mortgage market, but in the housing market. Houses cost plenty at present, and one way to stop that trend is for more housing to be built.
Are there any potential problems?
Johnson may choose to go down the route of unlocking brownfield sites and other moves to enable the creation of more homes. If building more homes takes the edge off prices, that’s when other initiatives such as Deposit Unlock can come into their own and hopefully allow people to buy their own homes.
One possible problem is the approach taken when it comes to the creation of homes. There has been criticism in some quarters regarding the number of developments that are unappealing and soulless, putting off potential buyers.
If the government truly engages in building more homes, then throwing them up without thinking about the real desires of people when it comes to where they want to live is something to consider.
When will the review be completed?
Boris has said that the review should be available later this year, with Autumn given as the time it should be expected. A report is set to be issued with the findings.
Whether you are a freelancer, a contractor, or somebody keen on securing a standard residential mortgage, there is a possibility that a mortgage is something you are finding tricky to secure at present. Hopefully Boris will put some plans into action so that those wanting to home will find things a little easier sooner rather than later.
