The government’s attempt to guarantee up to 100,000 new mortgages at up to 95 per cent loan-to-value for new build properties throughout England has been described as a whitewash.
Paul Holmes, chief executive officer at Firstrung, noted the best way to assist first-time buyers (FTBs) in their efforts to get a foot on the housing ladder would be through falling house prices .
The industry figure was speaking in response to prime minister David Cameron’s announcement of the scheme, which is to be led by the Home Builders Federation and the Council of Mortgage Lenders and promises a deluge of new mortgage opportunities.
Mr Holmes said he is finding it difficult to understand the logic of the move, as it is “deliberately aimed at supporting house builders by encouraging them to continue to ask far too much for a property that simply isn’t worth it”.
He claimed that rather than lending a helping hand to FTBs, the initiative will only serve to prop up the value of property builders, adding there is also talk of 30 per cent to 35 per cent deposits.
