The all-party Housing, Communities and Local Government committee of MPs has launched a probe into how renters can afford to become home buyers.
It will be looking at how the Government supports first-time buyers through reliefs, such as for stamp duty , and financial products such as special ISAs and mortgages. It will explore how these could be improved to help people get on the housing ladder.
The average home in England cost seven times average earnings in 2014, according to the government. Affordability worsened to nine times earnings in 2021, although it has since improved to 8.25 times in 2023.
The inquiry is also likely to examine the plans announced by the Chancellor last week, including the creation of a permanent mortgage guarantee scheme and a review of Financial Conduct Authority lending rules which could allow a prospective buyers’ record of paying rent on time to show they can afford mortgage repayments.
The inquiry will also be exploring existing routes to affordable home ownership delivered by the Affordable Homes Programme, including Shared Ownership, and how far these provide genuinely affordable routes to owning homes.
The committee is also likely to scrutinise the impact of proposed changes to the Right to Buy scheme on the ability of social housing tenants to own their home.
Florence Eshalomi, who chairs the committee, says: “Decades of failure to build anything like the homes we need means that far too many people stand no chance of making the first step on the housing ladder.
“If you don’t own your own home, and can’t turn to your family for help, how can you be expected to save up for a mortgage when more and more of your income is going on rent?
“Ultimately, it’s crucial that more homes are built, and that the government deliver on its 1.5m new homes target in this Parliament. But, when the prospect of owning a home is so slim for too many people, it is important that we examine the routes to affordable home ownership and how the government could help foster better support for first time buyers.”
Public evidence sessions for the inquiry are expected to commence in October. The committee is likely to hear from witnesses including major mortgage providers, home builders and developers, councils, and residential, rental sector, and leaseholder groups, and politicians.
This article is taken from Landlord Today