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Within a set of measures to kick start market
A scheme being developed by the Government that intends to benefit 100,000 young buyers has drawn criticism due to the risk that the tax payer may be over exposed should loans be defaulted on.
The loans would be available to buyers unable to put down more than a 5% deposit. Currently they are expected to put down a 20% deposit.
Some also believe that it could lead to a return of the boom and bust culture of easy credit available until the credit crunch.
The housing minister Grant Shapps said: “We are absolutely confident that we are not going back to the bad old ways. These mortgages will be assessed on the very tough criteria used for other home loans.” He went on to say “At the moment, builders aren’t building homes, lenders aren’t lending and people aren’t buying. We want this to change.”
The first-time buyer scheme was amongst over 130 measures that are hoped will kick start economic growth. Ideas include public money of more than £400 million to support house builders. Former government land will be sold for development. It will be easier for current tenants to buy their council houses.
There are also ideas regarding the release of equity in older peoples home to allow them to remain in their own homes for longer.
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