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Author Topic: Housebuilders are spending a combined £1bn to help first time buyers  (Read 8511 times)

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Philofacts

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Housebuilders including Persimmon, Barratt, and Taylor Wimpey are spending around £1bn on shared-equity schemes to help their first-time buyer customers get on the property ladder.

The details emerged after news that the Council of Mortgage Lenders (CML) is coming under increasing pressure to relax the supply of finance, especially to the first-time buyer market by reintroducing 95% loans.

The Home Builders Federation (HBF) figures reveal that £835m of shared equity loans were made available between January 2008 and February 2011, resulting in around 28,000 sales, with housebuilders helping their customers with a deposit to buy their homes.

The Government has also introduced shared-equity schemes including HomeBuy Direct (£450m) and FirstBuy (£250m). Most of the shared-equity funding supplied by housebuilders has been done in partnership with the Government schemes.

Stewart Baseley, executive chairman of the HBF, said: "The Government has demonstrated an understanding of the economic growth and social benefits created by tackling our housing crisis and it's vital that ministers don't take their foot off the pedal. A pro-development planning framework and a return to sensible mortgage lending will free house builders to create the homes, jobs and economic recovery the country, and families young and old, desperately need."

However, insiders within the industry are worried that money is being diverted away from development and that this may have serious long term effects for the housebuilders that have these "assets" on their balance sheets.

An HBF spokesman said: "These figures are released at the same time as the Government is currently talking to developers, lenders and insurers about how lending for first-time buyers can be increased. It is imperative solutions are found."
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