The recent Government announcement of an initiative to assist new build purchasers has prompted Eddie Goldsmith, partner at Goldsmith Williams, to urge the Government not to forget about home owners.
The new mortgage indemnity scheme will allow up to 100,000 potential home buyers in England to get on the property ladder. The initiative will see the Government underwriting part of the risk to lenders, allowing purchasers to borrow up to 95 per cent of the property value.
It is believed that the majority of the purchasers are likely to be first time buyers. Whilst this is good news for first time buyers looking for their first property, existing home owners “should not be overlooked”.
Mr Goldsmith comments:
“First-time buyers have been at risk of becoming an endangered species, so this latest announcement to tackle the problem is a great boost to the industry”
Despite welcoming David Cameron’s proposals Mr Goldsmith added:
" While much is being done for first-time buyers there are hundreds of thousands of people across England who are in a position where they cannot move to a bigger property because they are either in negative equity, or because they are unable to afford the large deposits required upfront due to the equity in their existing home having been eroded. For these people, finding the finance to move can be difficult. Even remortgaging can be a nightmare because of the reduced levels of loan to value being offered by lender".
Mr Goldsmith also added:
“We have seen the number of purchases and remortgages remain static over the 12 months to November this year in comparison to the year before. Our concern for those looking to trade up or remortgage has been echoed in our conversations with mortgage brokers who are worried that this area of the market could stagnate.
The house buying market has been ailing in recent years and the Government needs to ensure that it works to stimulate the sector as a whole and not just focus on individual elements of it.”
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