Government intervention, which in recent years has seen scores of legal and regulatory changes to the private rental sector, may be shifting towards buying.
There has been widespread criticism of government restrictions and tax changes affecting the lettings process, agents and landlords since 2015 in particular, which have been interpreted as an attack on the rental sector.
But in a speech to the Conservative party conference tomorrow, it appears likely that ownership rather than renting will be next in the legislative headlights.
A ‘Generation Buy’ scheme is to be promoted by Prime Minister Boris Johnson.
“I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society. And we’re going to fix that — ‘Generation Buy’ is what we’re going for” Johnson has told the Daily Telegraph newspaper ahead of his speech.
He says far more affordable mortgages should positively help first time buyers get on to the property ladder “even if they only have a very small amount to pay by way of deposit.” He also recommends a relaxation of stress tests used by banks, and calls for more 95 per cent loans to allow people to shift out of the private rental sector.
Johnson claims low-deposit mortgages could be “absolutely revolutionary” for young people and that work is already underway between the government and lenders of a new breed of long-term fixed-rate mortgages with deposits of no more than five per cent.
Polly Neate, head of the campaigning charity Shelter – which has frequently accused the government of not intervening enough to control what she sees as the excesses of the private rental sector – says of the new proposal: The government has tried lending money for years to get more people on the housing ladder…As the economic fallout of the pandemic starts to hit, government cannot keep offering more of the same.”
This post has originally been featured in Letting Agent Today.