The buyers left behind: Generation rent don’t want 95% mortgages – they want house prices to come down, says VICTORIA BISCHOFF
Generation rent don’t want 95 per cent mortgages – they want house prices to come crashing down to an attainable level. Or some light stagnation, at the very least.
So first-time buyers are increasingly frustrated that the schemes claiming to help them are in fact just pushing property prices further out of reach.
Yet the notion of doing anything to derail a booming housing market when the economy is already on thin ice is unthinkable.
It’s why Chancellor Rishi Sunak is believed to have caved to pleas for an extension to the stamp duty holiday.
Generation rent don’t want 95% mortgages – they want house prices to come crashing down
Without it, thousands of sales hit by delays could fall through – which may cost the Treasury valuable VAT from all the spending that comes with moving house.
But the perk hasn’t much helped those at the bottom of the ladder, many of whom are already exempt from paying stamp duty. And soaring demand has increased prices, negating any saving.
The Chancellor is also poised to announce a mortgage guarantee initiative in his budget today, to help buyers with small deposits.
Lenders were quick to pull 95 per cent mortgages at the start of the pandemic, preferring to focus on the rise in demand from wealthier borrowers.
But the scheme is expected to be open to everyone. And with larger loans come higher rates, plus stricter income requirements.
With young adults among those worst hit by the crisis, comfortable second-steppers may well seem like a safer bet to lenders.
The Government should also bear in mind that many of the properties usually snapped up by first-time buyers have now been rendered unsellable due to the cladding scandal.
Existing plans to help these homebuyers – many of whom purchased the flats with the help of government schemes – do not go nearly far enough.
And this could have devastating consequences for the property market, with experts warning this week that unaffordable repair bills could trigger a banking crisis if borrowers default on mortgages.
So as ministers flaunt the home-buying dream to the next generation, they should spare a thought for the hundreds of thousands who bought into this aspiration only to be trapped in unsafe properties, staring down the barrel of bankruptcy.
The Chancellor is poised to announce a mortgage guarantee initiative in the 3 March budget
Cash fix
Consumer groups are fast reaching the end of their tether with the lack of progress in talks to resolve Britain’s cash crisis.
Insiders say a virtual update hosted by the banking industry last week involved a lot of waffle but still no meaningful action.
With bank branches and ATMs closing every day, we can’t just wait for the Government to legislate. We need solutions now to prevent the millions of people who rely on cash being left with empty wallets.
Data disaster
When companies are leaking valuable data left, right and centre, you can understand the banks’ frustration at having to foot the full fraud refund bill.
Just last week, hackers swiped a treasure trove of data from Npower – including customers’ sort codes and the last four digits of their bank account numbers.
The more information fraudsters hold, the more legitimate they appear, and the easier it is to trick victims into handing over their savings.
Banks should be responsible for paying refunds. But fines for data breaches must help cover the cost.
Thoughtful firms
Last week, I praised flower delivery firm Bloom & Wild for offering customers the chance to opt out of marketing emails about Mothers’ Day.
It seems other retailers are being just as considerate. Money Mail reader Denise says: ‘I would like to add Superdrug to your list of thoughtful companies. I lost my mum in 2013 and this day is a sad reminder that she is not with us.’
Sue adds: ‘My husband wrote to Waitrose pointing out that the wording of its advertisements could be quite insensitive.
‘So I was heartened to receive emails from Waitrose and Boots giving me the choice to opt out of Mothers’ Day emails without jeopardising receipt of other offers. Maybe more firms are now getting the message.’
v.bischoff@dailymail.co.uk