Government first-time buyer plans barely scratch the surface

Government plans to increase home ownership will not be enough to counter the problems faced by people trying to get onto the property ladder, the Por

11:03 26 May 2005

Government plans to increase home ownership will not be enough to counter the problems faced by people trying to get onto the property ladder, the Portman Building Society has said.

Yesterday, Chancellor Gordon Brown announced that 100 surplus NHS sites will be used for the construction of about 400 new homes, many for first-time buyers, with hundreds more public sector sites earmarked for housing development.

This, coupled with new shared equity plans - where the Government and mortgage lenders contribute part of the cost of a house, is part of a plan to get 20,000 new homeowners onto the property ladder a year for the next five years.

But today Portman has criticised the plans as "unambitious".

"The proposals seem relatively undeveloped at this stage but the limited scale of the initiative is clear. At the levels proposed, the scheme will barely scratch the surface of the problem," said Matthew Wyles, Portmans development director.

Portman points out that Council of Mortgage Lenders figures show there were 358,000 first-time buyers in 2004 when they made-up the historically low figure of 29 per cent of the market.

The Council of Mortgage Lenders itself welcomed the shared equity scheme, and said it was glad affordable housing was moving higher up the political agenda - but the organisation also felt more should be done.

The deputy director-general of the council, Peter Williams, commented: "The proposed new public/private equity lending hybrid that we are working on with the Government will help to contribute towards the Government's anticipated total of 20,000 equity loans a year, designed to make home-ownership more accessible for those who cannot afford to enter the market at full market rates.

"But we recognise that this is still a modest contribution in the context of well over a million housing transactions a year, and must crucially be accompanied by increased housing supply and other measures. We would continue to urge, for example, further reform of stamp duty. Both the Government and the private sector need to innovate, and tackle affordability issues from a variety of different angles."