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We will not ‘endlessly expand state’ to fix housing crisis, says prime minister
Boris Johnson said he will not fix the “broken housing market” by “endlessly expanding the state”, as he announced plans to introduce 5% fixed-rate mortgages for first-time buyers.
Speaking at the virtual Conservative Party Conference, the prime minister vowed to turn "generation rent into generation buy" and tackle the difficulties younger people face in getting on the property ladder.
He said: "We will fix the long-term problems of this country not by endlessly expanding the state, but by giving power back to people – the fundamental life-affirming power of home ownership, the power to decide what colour to paint your own front door."
As part of this Mr Johnson said he would look to introduce new 5% mortgages, which he hoped would “create two million more owner-occupiers”.
The proposals would apply to young first-time buyers and would see them be able to take out mortgages up to 95% of the value of their property.
Mr Johnson said: “When COVID struck there were millions of people, often young people, who found themselves locked down in rented accommodation, without private space, without a garden, forced to use ironing boards for desks and bedrooms for offices.
“I know that many people are of course happy with renting and the flexibility that it offers. But for most people it is still true that the overwhelming instinct is to buy.
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“Many of them simply can’t – not because they can’t afford the mortgage, but because they can’t afford the deposit.”
Mr Johnson added that the government’s previously announced plans to “transform the sclerotic planning system” will make it “faster and easier to build beautiful new homes”, but said these reforms “will take time” and “are not enough on their own”.
During his speech, he compared the government’s current position “in the teeth of the pandemic” to that faced by ministers during the Second World War and vowed “to create the conditions for a dynamic recovery that is led not by the state but by free enterprise”.
Mr Johnson said the plan to introduce 5% mortgages would spread the opportunity of home ownership to “every part of the country”.
The plans are the latest in a series of policies introduced by the current government in an attempt to boost access to homeownership.
Other policies include First Homes, which would see first-time buyers able to purchase properties at discounts of up to 25%, and the shared ownership Right to Buy, which would give housing association tenants the opportunity to buy a share of their property.
The government is also planning to make a series of changes to the shared ownership model, which includes allowing individuals to buy homes with an minimum initial stake of 10%.
