As part of its agenda to boost growth the Government has announced a new 'Help to Buy' scheme to inject momentum into the stalled housing market. Under the scheme, the Government will provide help for existing home owners as well as first-time buyers in order to kick-start the housing market.
Its launch will come as a very welcome boost for housebuilders who have suffered the effects of stalled bank lending since the onset of the credit crunch.
With economic growth yet to take off and as a result of the high level of deposits required by mortgage lenders, young people and families continue to be excluded from home ownership. According to the Home Builders Federation, eight out of ten first-time buyers require financial assistance from family or friends and the average age of first-time buyers has soared. Almost a fifth of women and a third of men aged between 20 and 34 still live at home with parents.
This dramatic reduction in demand means that building rates remain at levels not seen since the 1920s. The Government is therefore relying upon a significant investment in housing to kick-start the construction industry and growth of the wider economy.