The idea is one of a few put forward by The Housing and Finance Institute (HFI), in a bid to help young people gain a footing on the housing ladder. They suggest the loan be repaid as a proportion of their salary, once their earnings reached a certain level or repaid once they sell the property.
Other suggestions include enabling stamp duty to be paid upon the sale of a property rather than the purchase and the Institute has also put forward a housing allowance tax scheme which deducts mortgage interest from the tax of young home owners.
The group said: “More must be done to ensure that affordable home ownership is accessible to those who would benefit from access to it, particularly the young and least well off.”
The HFI added that financial support should be prioritised for home ownership and social housing, rather than private renting.
In the past 15 years there has been a 20% drop in home ownership among under 45-year-olds, with overall home ownership the same as it was in 1985. It’s due in part to lower access to social housing and the rising cost of renting.
According to the Housing and Finance Institute, it takes the typical first-time buyers around eight years to save for a deposit in the UK – in London it’s more like 10 years.
The Government’s Help to Buy Scheme, which has benefited around 150,000 people, comes to an end in 2021 and the HFI says something is needed to help people once it stops.
The Government is being urged to lend a 10% deposit to first time buyers
Posted 7th August 2018
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