Matthew Russell,

The Mortgage Business

It is no secret that many of our key workers – and by that I refer to the likes of police, firefighters, nurses and those that are providing useful and essential services to the community – are finding themselves ostracised when it comes to buying property in many UK towns and cities. At The Mortgage Business we do not specialise in any starter home initiatives or shared ownership schemes, however we are fully aware that in many areas there are no longer any properties suitable for first-time buyers (FTBs).

This leaves the options of purchasing perhaps a long way outside the area of work, or choosing the second option to rent for a long period of time. Indeed many choose to leave the purchasing of a property until later in life – our records show an average age of 30+ for FTBs.

This in turn leaves further implication for the housing market, with a large demand for quality, privately rented accommodation – I say privately because in most towns there is little success in developing council or corporation housing.

One growth area this has raised is with local councils openly advertising for landlords to help fill their vast rental demands. These schemes may have some appeal to landlords, or even prospective landlords, with a rent guarantee up front for a number of years, and a property maintenance contract with the council.

Other new schemes emerging are private ‘rent to buy’ schemes – but more of that another time.

Guy Todd,

Infinity Mortgages

The housing market will not adjust for FTB key workers – it is shame that they are an unfortunate minority in the overall scheme of things. Similarly, the economy is unlikely to be directly affected. However, the implications of driving away key workers on social welfare do not bear thinking about.

Government intervention in ownership measures will never be a quick fix – something has to happen to affordability. Although mortgage finance is at its most affordable pound for pound, many FTB’s cannot borrow enough pounds. Mortgage finance for FTB’s needs to be made even more affordable so lenders could justify increasing income multiple thresholds.

The only realistic way that the Government can do this is to subsidise FTB’s mortgage payments – key workers will invariably be on the Government payroll anyway – perhaps by way of a mechanism similar to MIRAS. Stamp duty could also be waived for FTB’s, easing the burden on deposit raising.

Sally Laker,

Mortgage Intelligence

Lack of FTBs is already affecting the number of house purchase loans, and in November according to the Council of Mortgage Lenders (CML) they accounted for only 26%. In borrowing an average of 2.92 times their income, they are forced to save sufficient funds to get a first step on the property ladder.

Key worker schemes and shared ownership schemes are good ideas but the lack of readily accessible information and availability has prevented them reaching a widespread audience. It is time for the Government to accept that we are a nation of home buyers, and offer help to would be FTBs.

The obvious step would be to change the stamp duty charge and create a different tariff for them. The current level of £60,000 is ridiculous and at 1% could form a substantial part of an initial deposit. The average house price is now £142,000 so this just confirms how outdated the current charge is.

Alastair Pate,

Kensington Mortgage Company

FTBs are the lifeblood of the mortgage industry. Without them the entire market slows down significantly even if re-mortgaging is buoyant. Also the affordability of homes for some sectors of the workforce has to be of concern to those of us who rely on public services.

It seems odd that at a time when mortgages are their most affordable more and more people are being excluded from the chance to own their own home.

A flexible housing market, both on the supply and the demand side is necessary to ensure housing needs are met. And, as is sometimes the case with Government, the laudable aim of providing desirable and affordable housing is being stifled by a lack of flexibility and pace of change amongst the bureaucrats.

As the experts – construction companies – tell us, land needs to be made available quickly and planning permission needs to be streamlined. Not just for ‘executive homes’ but for desirable starter homes.

This will get people on the property ladder and safeguard the next generation of homebuyers for the mortgage industry.

Stuart Aitken,

SPML

Shortage of affordable housing for key workers is really an issue about the sort of society we want to live in. If inner cities can’t attract teachers, nurses,and other key workers, then staff shortages in education and health are clearly detrimental.

With regard to the housing market, key workers are a minority and their situation will not easily cause a shift in property pricing – which is determined by supply and demand in the overall market.

The answer to this situation lies in the hands of Government, which has done a little, but nowhere near enough. The long-term solution to bring supply more in line with demand is to free up more land for development and incentivise that development. In the short-term, more Government money needs to be allocated directly to key workers to facilitate their entry into home ownership in inner cities.