• David Baird

Is "Generation Buy" feasible?

In an interview with Telegraph, Prime Minister Boris Johnson said that he wanted to create a “Generation Buy” of young people enabled to engage in the world of capitalism by investing in their own home.

Boris has asked ministers to work up plans to allow more mortgages to be offered with a 5 per cent deposit, to help would-be homeowners who are currently locked out of the market by the demand for deposits of 10 or 15 per cent of the property’s value.

Risky lending in the 2000s was blamed for contributing to the collapse of a number of financial institutions which offered mortgages on tiny deposits or even loans larger than the value of the property being purchased. Strict affordability requirements were brought in to make sure this does not happen again.

In my expert opinion, to bypass these requirements would not be an option as a repeat of the crash in 2008 would only add to the economic woes we potentially face. A form of guarantee or encouragement to lenders to lend at a 95% threshold is something as an independent mortgage advisor, I believe is the only sustainable way forward.

The key for potential buyers is the make sure you have a whole of market mortgage broker in your corner who is able to research and obtain the best mortgage package for you.

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