Charles Haresnape, managing director of Aldermore Residential Mortgages, said: "Any initiative designed to help the housing market and first time buyers in particular, has to be welcomed.
“However, with any Government scheme the devil is in the detail and it will be interesting to hear later today precisely how the Government backed mortgage indemnity scheme will work.
“It will also be interesting to see how the proposed £400 million house building fund translates into new homes. At the moment there are approximately 100,000 new homes being built every year, but that figure needs to increase to 240,000 if demand for new housing is to be satisfied.
“It is suggested that the Government proposed new initiative will result in just 16,000 new properties which still leaves the Government woefully short of its target."
Karen Barrett, chief executive of unbiased.co.uk, said that it is potentially a good time to think about taking those first steps to buy.
She said: “There is an undoubted appetite from potential first time buyers seeking a way into the mortgage market.
“Our latest Advice Drivers report found that first time buyer advice dominates consumer searches on the ‘find a mortgage adviser’ service with 35% of mortgage advice searches on unbiased.co.uk in October being first-time buyer enquiries.
“The fact that demand for first-time buyer advice remain high, suggests a continuous momentum in the first-time buyer market and a real consumer drive for mortgage advice.
“Increasingly attractive rates are entering the market and we are seeing the return of many lenders offering deals for consumers with a 10% or smaller deposit. Coupled with today’s announcement of Government help, this will serve as a real boost for some of those struggling to get their foot in the door of their first property.”
Paragon Group chief executive Nigel Terrington said it was a step in the right direction. “We welcome any measures that will help stimulate both the housing and mortgage markets.
“It is clear that the UK has a serious housing problem, with not enough homes being built and a lack of mortgage finance. Current housing completions simply aren’t sufficient to meet forecast household formations, so a commitment to build thousands of new homes is a positive start, whilst plans to support homebuyers through the mortgage indemnity scheme will stimulate the first time buyer market.
“It is crucial to the success of the mortgage market and the economy that we have a housing market in balance and with growth options across both the rental and owner-occupied sectors.”
Tracy Kellett, managing director of buying agents, BDI Home Finders, asked how many people will genuinely benefit from the new build indemnity scheme?
"If the Government and house builders are taking on the risk, what will the criteria be for people applying for these loans?
"The real number of people enjoying the scheme is likely to be far lower than the headline number. The devil, as ever, is in the detail.
"We'll have to wait and see whether the new build indemnity scheme is the panacea the market needs or just more PR fluff.
"The Government has become so focused on the first time buyer that it has forgotten the squeezed middle.
"Any housing strategy has to cascade upwards through the chain, not focus purely on the first link.
"Given the scale of the market crisis, it's unlikely it can do anything at all.
"Ultimately, only the market can make the market better."
Samantha Baden, property analyst at FindaProperty.com disagreed: “Building more homes for first time buyers and freeing up mortgage finance for them is crucial in getting the entire UK housing market moving more freely.
“Our analysis shows that the average family in rental accommodation will now be paying around £890 a month or 46.2% of their net monthly income on rent, so enabling more first time buyers to get their first home and introducing Right to Buy for social housing tenants is an important step forward.
“Getting your own home is a critical step in helping boost people’s economic confidence and giving them a platform to build an investment for the future.
“We welcome this initiative as a valuable way to kick-start the first time buyer market.”
What do you think? Let us know your comments.
