At last year’s Conservative Party conference, the Prime Minister pledged to provide affordable homes for people around the UK. Although the news was welcomed by many, especially those struggling to get on to the property ladder, others have raised concerns about the scheme.
The initiative was first announced a year ago, promising that 200,000 affordable homes would be available to first time buyers, with a discount of 20%. To cover the cost of the discount, the developer won’t be obliged to contribute to local infrastructure or provide homes with affordable rents.
One concern raised by experts is that there will be fewer homes with affordable rents for those who can’t afford to buy a house or flat. Local authorities are also concerned that they won’t benefit from the cash invested by developers for local infrastructure.
A huge concern for others is the affordability aspect of the properties. They will be available to people aged below 40 who are first time buyers. Although the buyers will receive a discount, they will be able to sell or rent them out at their full market value after owning the property for five years. In this case, the property would be sold at its full value to the next buyer and may not be an ‘affordable home’.
Although the scheme may help some people to buy their own property, it may have limited scope to assist those who have lower incomes, making it harder for them to afford a property. Mortgage advisers who study to gain the CeMAP qualification have experience in helping people to calculate affordability and to obtain a mortgage that suits their budget.