Housing Minister Pushes New Builds

The start of the year has been awash with conflicting stories of house price boom and stories of another impending bust. One headline suggests there are no mortgage deals worth mentioning and another showing excitement at all the new exciting deals available.

One thing is for sure that 2010 and on will be difficult. Most of the headlines can be attributed to spin by the intersted parties, but the truth of the matter is the first time buyer market is stagnant and is vital for the overall health of the housing market.

It’s not just the responsibility of the banks to increase lending to new buyers it is also the responsibility of the government to ensure there are the new builds and schemes in place to get these buyers on the property ladder. A recent positive step has been Housing Minister John Healey announcing £83 million to resume the building of over 5,700 new and affordable homes which were stalled by the recession. These steps also boost the economy and create employment.

John Healey said: “We’re putting the weight of Government investment into building much-needed affordable homes, keeping people in work and giving young people a chance of apprenticeships.

“That’s why today I’m allocating £83 million to get 87 stalled developments across the country up and running again, creating 1,700 jobs and giving more than 2,200 first-time buyers the chance to take an affordable step onto the property ladder.

“In this recession, the Government has not stepped back and left the homes and jobs we need to the market. We’re using public funding to keep Britain building through the downturn.”

The banks in turn are now offering more competitive rates with fixed rate mortgages at a 6 year low. However, an interesting point is that 6 years ago the base rate was not at 0.5% so that statistic is a little skewed. Nevertheless, cheaper deals will bring activity to the market, and it remains to be seen what overall impact they have when you consider all the other factors stifling the market.