Boris Johnson has said he wants to create a “Generation Buy,” to help young people purchase homes with mortgages requiring low deposits.
Ahead of his Conservative Party conference speech on Tuesday, the PM signalled he wants to focus his attention on a "massive domestic agenda" and deliver his manifesto pledge despite COVID-19.
In an interview with the Telegraph, Johnson vowed to “fix the problem of unaffordable deposits,” that make people feel excluded from the property market.
“I think a huge, huge number of people feel totally excluded from capitalism, from the idea of home ownership, which is so vital for our society.
“And we’re going to fix that — ‘Generation Buy’ is what we’re going for,” the Tory leader told the newspaper.
He said that mortgages that help people get on to the property ladder were needed, “even if they only have a very small amount to pay by way of deposit,” by removing stress tests banks can offer 95% mortgage loans.
Since the financial crash in 2008, banks are required to stress-test applicants, to ensure they aren’t borrowing more than they can afford.
The PM stressed that low-deposit mortgages could be “absolutely revolutionary” for young people. According to the paper, Johnson asked ministers to work on plans encouraging long-term fixed-rate mortgages with 5% deposits.
Millions of Brits are shut out from the housing market because they cannot afford deposits, which usually run to 15% to 20% of a property’s value.
It comes after, housing secretary Robert Jenrick announced changes to England’s shared ownership schemes, in a bid to increase the number of buyers and make it easier for homeowners to increase their share of a property. Housing policy is devolved in Scotland, Wales, and Northern Ireland.
Plans unveiled in September will see more first-time buyers and social housing tenants able to part-buy their homes, as well as a wave of new homes, with some properties available for shared ownership.
The reforms will see the size of deposits needed to get in the housing market reduce, with the minimum initial share cut from 25% to 10%. The move will eventually allow more housing association tenants to buy a stake in their own homes.
In early September, the government also unveiled a £12.2bn ($16bn) plan to build up to 180,000 affordable homes over the next six years, and promised more social housing tenants will be able to part-buy their homes.
Under the plans, around half the new homes will be for sale, another 40% will be let at “affordable and social rent,” and another 10% will be supported housing for people with physical and mental health issues.
Watch: UK property: What is shared ownership?