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| First-time house buyers need help, says Grant Shapps | First-time house buyers need help, says Grant Shapps |
| (40 minutes later) | |
| Housing and lending bodies are facing government calls to lend to first-time buyers - but the UK's major lenders are not at Tuesday's summit. | Housing and lending bodies are facing government calls to lend to first-time buyers - but the UK's major lenders are not at Tuesday's summit. |
| Housing minister Grant Shapps has summoned various parties to "frank and open" discussions on difficulties for first-time buyers. | Housing minister Grant Shapps has summoned various parties to "frank and open" discussions on difficulties for first-time buyers. |
| The government estimates 1.4 million households want to own their own home, but face a mortgage squeeze. | The government estimates 1.4 million households want to own their own home, but face a mortgage squeeze. |
| However, the major lenders were not specifically invited to the meeting. | However, the major lenders were not specifically invited to the meeting. |
| The Council of Mortgage Lenders (CML) and the Building Societies Association - which represent lenders - are attending the summit. | The Council of Mortgage Lenders (CML) and the Building Societies Association - which represent lenders - are attending the summit. |
| Mr Shapps is expected to use the meeting to call on banks to offer more help to first-time buyers, such as creating new products specifically aimed at helping people get on the property ladder. | Mr Shapps is expected to use the meeting to call on banks to offer more help to first-time buyers, such as creating new products specifically aimed at helping people get on the property ladder. |
| Difficulties | Difficulties |
| Figures show a downward trend in first-time buyer numbers throughout 2010. | Figures show a downward trend in first-time buyer numbers throughout 2010. |
| There was a sharp fall at the end of the year, according to the British Bankers' Association (BBA), although this was skewed by the rush to beat the end of the stamp duty holiday at the end of 2009. | There was a sharp fall at the end of the year, according to the British Bankers' Association (BBA), although this was skewed by the rush to beat the end of the stamp duty holiday at the end of 2009. |
| First-time buyers are regarded as crucial to any housing revival, but many have only been able to get onto the ladder with financial assistance from relatives. | First-time buyers are regarded as crucial to any housing revival, but many have only been able to get onto the ladder with financial assistance from relatives. |
| The average deposit required when buying a property was 23% in December, according to the BBA, up from 21% the previous month. | The average deposit required when buying a property was 23% in December, according to the BBA, up from 21% the previous month. |
| This has been partly the result of strict lending criteria from mortgage providers - including turning down potential borrowers with any blot on their credit history. | This has been partly the result of strict lending criteria from mortgage providers - including turning down potential borrowers with any blot on their credit history. |
| "We want to do more to help aspiring first-time buyers - the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability," Mr Shapps said. | "We want to do more to help aspiring first-time buyers - the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability," Mr Shapps said. |
| "So I am calling together key figures from across industry to discuss how we can tackle this problem. This cannot be achieved simply by top-down diktats from government - there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market." | "So I am calling together key figures from across industry to discuss how we can tackle this problem. This cannot be achieved simply by top-down diktats from government - there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market." |
| However, the CML questioned the minister's figures, saying that the typical age of a first-time buyer who does not receive help from relatives was 31. | |
| The lenders' group said that funding problems for lenders and stricter regulations - which required lenders to hold more capital for lending to "riskier" borrowers - meant that things could not change quickly. | |
| "First-time buyer numbers will only recover slowly over time, and may take several years to approach the annual rate of 400,000 to 500,000 purchases that we have seen historically," the CML said. | |
| "A range of initiatives - including shared ownership, product innovation and mortgage insurance - could all potentially play a part, but none is likely to be a magic bullet that restores normality to the mortgage market, for first-time buyers or anyone else. | |
| "This is likely to be a gradual process as confidence in funding markets and lending decisions is restored." | |
| 'Help' | 'Help' |
| Extra help cannot come soon enough for Nick and Marie Smith. They had been renting a home for four years, while saving for a deposit. | Extra help cannot come soon enough for Nick and Marie Smith. They had been renting a home for four years, while saving for a deposit. |
| The couple, who have two young children, realised that to raise enough money they needed to move in with Mr Smith's mother in Wiltshire. | The couple, who have two young children, realised that to raise enough money they needed to move in with Mr Smith's mother in Wiltshire. |
| "It cannot be for ever. I would be nice to be together in our own home," said Mrs Smith. | "It cannot be for ever. I would be nice to be together in our own home," said Mrs Smith. |
| They were keen for Mr Shapps to demand that lenders loosen their lending criteria. | They were keen for Mr Shapps to demand that lenders loosen their lending criteria. |
| "They have got to do something about this level of deposit. It is just ridiculous. Nobody can save that level of deposit," Mr Smith, 32, said. | |
| "It does not just affect first-time buyers, it affects everyone up the chain. He [Mr Shapps] really needs to get something going and improve their lending. | "It does not just affect first-time buyers, it affects everyone up the chain. He [Mr Shapps] really needs to get something going and improve their lending. |
| "The banks should be working for us, not the other way around." | "The banks should be working for us, not the other way around." |
| Separate research from housing website Rightmove found that 23% of people who planned to buy a property in the coming year would be first-time buyers. | Separate research from housing website Rightmove found that 23% of people who planned to buy a property in the coming year would be first-time buyers. |
| Generally, it is thought that double this proportion of first-time buyers is a sign of a healthy housing market. | Generally, it is thought that double this proportion of first-time buyers is a sign of a healthy housing market. |
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