Johnson planning to boost first-time buyer mortgages

07 Oct 2020

The UK government has proposed 95% loan-to-value mortgages to encourage first-time buyers to consider taking out a mortgage. 

During a keynote speech to the Conservative Party Conference, British Prime Minister Boris Johnson said, “We need now to take forward one of the key proposals of our manifesto of 2019: giving young first-time buyers the chance to take out a long-term fixed-rate mortgage of up to 95% of the value of the home.”

Johnson described the low rates of home ownership among young people as “disgraceful” and is planning to improve this. “We will help turn generation rent into generation buy,” he said. 

He continued to note that there are around two million people who could potentially get home loans but could afford mortgage repayments. Lenders withdrew their high loan-to-value mortgages once the coronavirus pandemic started to spread around the UK, and the lockdown was ordered. 

Once the housing market reopened after the lockdown, there was a backlog of mortgage enquires from buyers. This was paired with the economic uncertainty caused by the coronavirus pandemic and its effect it had on banks.

Details about the government’s planned scheme have not yet been published but reports claim that banks may eliminate the strict stress tests that were created after the 2008 financial crash.