Last year, an investigation by the financial regulator found that the mortgage market could be improved, and therefore brought in new rules which limited the ease at which banks could lend out cash. They are once again undertaking a review, but at the same time, David Cameron is set to announce that 200,000 more affordable homes will be built for struggling first time buyers.
The Financial Conduct Authority (FCA) have announced that they will be carrying out a review into the mortgage market in the UK to assess whether it could be improved, where the improvements should be made, and how.
The regulations introduced recently by the FCA have made getting a mortgage more difficult for the people who would be likely to default on their repayments, by forcing banks to scrutinise the outgoings of each applicant. While this has made home ownership more difficult for some people, it has also protected them from likely financial issues.
While the FCA are looking into improving the market, the Prime Minister is set to try and get more people into the market.
Speaking at the Conservative conference, Cameron is to say that he plans to turn “generation rent” into “generation buy”. He wants this parliament to create a ‘defining decade’ for first time buyers.
Of course, promises like this are falling on the tired ears of the property market. With the efforts of recent parliaments, since the financial crash, to turn the market into a stable and secure market that anyone can buy into, it can be hard to have faith in there ever being a financial turnaround on a market that seems resolute in being inaccessible.
“When a generation of hard-working men and women in their 20s and 30s are waking up each morning in their childhood bedrooms – that should be a wake-up call for us,” Mr Cameron is to tell Tory members at the conference.
The Prime Minister is to bring in new plans that mean builders in England will be able to offer starter homes to under 40s for a discounted price. Instead of offering low cost homes for rent, they will be more able to offer low cost homes to buy.
Hopefully prices will be brought down on homes overall, and make them more accessible. While schemes so far have managed to help people out on an individual basis, little progress has been seen on the whole.
Hopefully the changes Cameron plans to make, and any changes the FCA see fit to make, will lead the housing market back to a stable, affordable state which is welcoming to first time buyers and keyworkers.