New strategy given a cautious welcome (From Your Local Guardian)

New strategy given a cautious welcome

11:50am Monday 19th December 2011

As first-time buyer sales fall to the lowest level in three years, most south London property experts have issued a cautious if qualified welcome to the Government’s new housing strategy.

Some believe further measures may be needed to “unstick,” as prime minister David Cameron describes it, the housing market and end the cycle in which “lenders won’t lend, builders can’t build and buyers can’t buy”.

“This week’s housing strategy announcement from the Government is welcome news for first-time buyers,” commented National Association of Estate Agents president Wendy Evans-Scott.

However the NAEA president, who manages Hamptons International in Epsom, wants to see the cornerstone of the strategy – the mortgage guarantee for first-time buyers – extended beyond new-build homes to cover existing housing stock.

This would mean even more first timers being able to qualify for subsidised 95 per cent mortgages.

“There is still a lending barrier facing those entering the housing market for the first time,” she said.

“To address this, Government could ensure banks are given clearer incentives to offer mortgage finance to the UK’s embattled first-time buyers, and also extend the mortgage guarantee for first-time buyers beyond just new-build homes.”

The NAEA’s October market report saw first-time buyer sales fall six per cent from September, to just 16 per cent of overall sales. This is the lowest level since December 2008.

The prime minister and his deputy, Nick Clegg, announced their new strategy while visiting the new Boxgrove Gardens estate in Guildford, managed by the housing association Affinity Sutton. Commenting on the news, Affinity sales director Yvonne Ruggins said “only time will tell” if the government’s “ambitious strategy is ambitious enough”.

“It is a positive step towards responsible, affordability-based lending and a step away from the toxic combination of the excessively high deposits and a shortage of housing supply that has plagued the industry,” she commented.

House builders Persimmon Homes also welcomed the government’s “radical” £400 million subsidy for the construction of 16,000 new homes and underwriting of the first-time buyer mortgages. “We recognise just how important first-time buyers are in sustaining the property market,” said Edward Owens, managing director of Persimmon Homes South East.

“We, along with the rest of the construction industry, look forward to seeing the impact these positive measures should make.”