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Tories pledge “revolutionary” low deposit mortgages for FTBs

Prime Minister Boris Johnson says he wants to create a ‘Generation Buy’ to help young people purchase homes with low-deposit mortgages.

In a speech tomorrow to the Conservatives’ virtual conference he will say that as part of a new domestic agenda, he wants to “fix the problem of unaffordable deposits” that make people feel excluded from the housing market and wider economy.

“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. 

Johnson claims low-deposit mortgages could be “absolutely revolutionary” for young people and that work is already underway between the government and lenders on a new breed of long-term fixed-rate mortgages with deposits of no more than five per cent.

The MoneySavingExpert consumer finance service says there are now no standard mortgage deals available to first time buyers with a five per cent deposit and there are only 20 standard deals available for those with a 10 per cent deposit – with several of these being long-term fixed deals where you'd be locked in for up to 11 years.

At the start of the year, before the pandemic, there were 751 deals available for those with a 10 per cent deposit and 386 available at five per cent - although this included all types of deals, not just standard ones.

  • Peter Hendry

    Are Longer Loans really the solution ???

    Apparently (suddenly) as if by magic, new loan schemes could suddenly appear for first time buyers designed to help generation rent?

    Isn’t this really all about propping up house prices rather than helping generation rent to become prudent home buyers?

    I shall wait to see how the detail of this new initiative is to work but if its effect is to keep price levels UNaffordable in comparison with real-time earnings, that’s helping the money lenders more than it’s helping those generation renters who may wish to buy.

    There are perfectly adequate arrangements for advancing loans to buyers already in existence. These have been fully stress-tested over decades and through both good times and bad financially speaking. People don’t need more extended loan terms, they need a re-think on how prices are arrived at in the first place! I’ve been campaigning for improvements in this area for quite a while but to no avail so far. The Hendry Solution as set out online explains better alternative by far.

    Where is the due diligence in all of this considering the uncertain times we are now facing?


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