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Reaction to the government’s mortgage market review announcement

The Prime Minister recently announced new measures to enable more people to get onto the property ladder, including a comprehensive review of the mortgage market.

In his speech, Boris Johnson set out the government’s commitment to reviewing the mortgage market, with the aim of reversing the decline in homeownership rates. Johnson also stated his ambition to unlock the opportunity of home ownership for more people through Right to Buy scheme.

The Prime Minister also announced a commitment to help those in a position to buy, to access the mortgage finance they need, ensuring people are incentivised to save for a deposit no matter their financial situation, and improving the supply of housing across the country.

Commenting on the proposals, Thomas Jackson, Managing Director of Cooper Associates Mortgages, said:

“Any change providing individuals the opportunity onto the housing ladder is a welcome one. This will, however, be early news for lenders. How, and if, they plan to adopt these suggested changes to Universal Credits and Housing Benefit remains to be seen. Lenders have a responsibility to ensure both affordability and sustainability for borrowers. Further details are needed but this will be a welcome step towards helping individuals with challenges on affordability assessments.

So far, Right to Buy has been beneficial. Saving for a deposit is one of the biggest hurdles for anyone trying to buy their home and is an ever-increasing challenge at present with the significant increases seen to property prices, combined with the cost-of-living crisis. However, enabling more individuals to access a Right to Buy scheme does not mitigate the problem of the number of people requiring social housing, compared to the availability of social housing.

One area of concern remains the end of the availability of the Help to Buy Scheme in November. The PM has neglected to detail the proposed solution to its termination, and yet it supports a number of first-time entrants into the market.”

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