Coalition Housing Minister Grant Shapps has given his views on how to stimulate the first-time buyer market. He has told lenders that they should seriously consider offering “mate’s mortgages” which would be the ideal option for friends who can combine their money and secure a foot on the property ladder.
The call came at the minister’s second housing summit where Mr Shapps claimed the idea was perfect as friends, without access to the bank of Mum and Dad, can pool their resources together to raise the necessary deposit, and if done correctly it could become the mainstream alternative to years and years of saving. The mate’s rates scheme can also provide a boost to what is still a struggling United Kingdom housing market that now has “thirtysomethings” as the average age for first-time buyers.
Mr Shapps said: “If there are mates who are perfectly capable of paying monthly mortgage payments but are struggling to fund a deposit on their own, there should be straightforward options to unite with their friends and take the first step onto the housing ladder together. That is why I have once again called on key figures from across the housing market to come together and discuss ways to improve the availability of mortgages, and how existing products can be promoted much better.”
The Housing Minister was also quick to praise the new innovations and products such as the Governments First Buy scheme. Insurance providers will probably have to rethink conventional household insurance policies to cover such schemes and mortgage lenders were also urged to copy Lloyds “Lend a hand scheme”, where the buyers family are able to guarantee the mortgage.