Prime minister David Cameron and deputy prime minister Nick Clegg will unveil proposals for the government to carry part of the risk of new build mortgages, according to the Daily Telegraph.
The mortgage guarantee, the first time such a scheme has been attempted in the UK, will enable lenders to provide loans of up to 95% LTV to around 100,000 home buyers.
The government and house builders could be liable for losses in the event that a home is sold for less than the outstanding loan.
In addition, the government will set aside £400m for property developers to fund the stalled construction of 16,000 homes, £1.8bn towards affordable homes, £30m to support self builders, and £100m to bring empty homes back into use.
In the foreword to the Coalition’s new housing strategy, which is published today, Cameron and Clegg say Britain has been “under-building” for decades and that a “radical and unashamedly ambitious strategy” is needed to shake up the housing market.
The strategy also includes a proposal to double, from £26,000 to £52,000, the discount available to council tenants wishing to buy their home through the Right to Buy scheme.
