Boris Johnson announced on Tuesday the 6th of October, that it wanted to shift the population from ‘generation rent to generation buy’. Pre-lockdown, first time buyers who were ready to purchase their first home, are now pulling out across the country of these plans, due to mortgage rates and types, not being as financially accessible as before. The amount of people enquiring about rental properties has surged and now it is a Landlord’s market, meaning that rental prices have increased. In Kent, like across the country, as soon as a rental property comes onto the market, within the first couple of days being on the market, it is being let out.
The Prime Minister added that “there is currently up to two million people who could afford mortgage repayments but who cannot currently get home loans”. This is because many lenders withdrew their high loan-to value mortgages. When the market opened back it, it created a large backlog of mortgages, with the uncertainty of the extent of the recession, meant that mortgage brokers were not able to support riskier loans. This is where the mortgages went up to an 85%-90%, with hard to find long term fixed rates.
While currently there are no details on how exactly the scheme will work, however this help from the government was seen before in 2008, after the financial crash with the help to buy scheme, which saw a pre-financial crash mortgage rate of 100%.