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ARE MORTGAGES ABOUT TO GET A WHOLE LOT EASIER?

After a tricky year, it’s safe to say we’re all looking ahead to the next 12 months with a degree of hope that things may be somewhat easier – and the Bank of England’s prospective mortgage reforms could be the silver lining we’ve all been looking for!

We’re no strangers to the UK housing crisis, having spoken about it at length over the past four years. Arguably, one of the hardest hit demographics when it comes to the supply and demand crisis are first-time buyers –many of whom are forced to continue paying rising rental costs while also saving for that ever increasing deposit, or stuck living with family in potentially unsuitable accommodation whilst they save.

The UK government recognised the plight of “generation rent” in their Autumn budget speech, with the Prime Minister promising to turn “generation rent into generation buy” but that has remained an empty promise, until now.

New reports suggest that the Bank of England could be looking at easier options for those looking to secure a mortgage amongst concerns that first-time buyers are being pushed out of the property market. While many banks have been hesitant to offer high loan-to-value mortgages amongst fears of a house price crash following the COVID-19 pandemic, the Bank of England looks to be exploring plans for more mortgages to be offered with a deposit of only 5%. This, combined with record-low interest rates, could make it easier for a homeowner to repay their mortgage, and could see many more first-time buyers finally able to take that all-important step to home ownership.

But could that have detrimental affects on the current housing crisis?

In short – yes. The country is already in the midst of a supply and demand crisis, and with more affordable mortgage options potentially increasing demand even further we could find ourselves with an ever-increasing shortage of suitable homes available.

The solution to this problem seems simple enough – just build more homes! This isn’t as easy as it appears however, with a shortage of suitable land sites being identified for residential development across the country and an outdated planning system, house builders are being held up from providing the new homes so desperately required.

At Intro Crowd we aim to alleviate some of this pressure on the housing market by giving investors the opportunity to collectively fund strategic land sites across the country. Strategic land refers to undeveloped greenfield land located in an area with a defined need for current or near-future development, that has both good road access and access to local amenities such as shops, schools, public transport and medical care. These factors make a site sustainable in nature, which in turn can be attractive to house builders.

Once these sites are fully funded, Intro Crowd’s experienced planning team will take the site through the planning process and, if consent is granted, will then aim to sell the site to a house builder for residential development. This in turn will increase the volume of new homes available.

This article is for educational purposes only and does not constitute investment advice. This article does not amount to an invitation or inducement to buy or sell an investment nor does it solicit any such offer or invitation in any jurisdiction.

In all cases, readers should conduct their own investigation and analysis of the data in the article. Readers are strongly encouraged to seek independent legal and financial advice when considering an investment in strategic land. All statements of opinion and/or belief contained in this article and all views expressed and all projections, forecasts or statements relating to expectations regarding future events represent Intro Crowd’s own assessment and interpretation of information available as at the date of this article.

No responsibility or liability is accepted by Intro Crowd for reliance on the contents of this article. 

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