Mortgage scheme: Inside PM’s new mortgage scheme – What is Generation Buy?

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Prime Minister Boris Johnson stood at the podium of the Tory conference today, where he addressed remote spectators. He detailed his intentions for the future of the country, including plans for reducing cases of COVID-19 and revitalising the faltering economy. Among his various promises made to Brits is a mortgage plan named Generation Buy, which includes some lofty goals.

What is Generation Buy?

Generation Buy is a Conservative scheme Mr Johnson hopes will encourage people to buy homes and rejuvenate the property market.

His scheme would allow first-time buyers to obtain a mortgage with just a five percent deposit.

The Prime Minister added the transfer to a “long-term, fixed-rate” mortgage would allow young adults to get their foot on the ladder and “fix our broken property market”.

He added he wanted to turn “generation rent” into “generation buy”, but offered little explanation on how he would accomplish this.

He also said the reforms would take time to realise, despite having promised policy to this effect in 2019.

Mr Johnson said: “But these reforms will take time and they are not enough on their own.

“We need now to take forward one of the key proposals of our manifesto of 2019: giving young, first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95 percent of the value of the home – vastly reducing the size of the deposit.”

Mr Johnson added: “We believe that this policy could create two million more owner-occupiers – the biggest expansion of homeownership since the 1980s.

“We will help turn generation rent into generation buy.”

He unveiled the future policy when speaking to the Daily Telegraph last week, saying he wanted to introduce more people to the benefits of capitalism.

He said: “I think a huge, huge number of people feel totally excluded from capitalism, from the idea of homeownership, which is so vital for our society.”

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“And we’re going to fix that – ‘Generation Buy’ is what we’re going for.”

Mr Johnson added his concept would end up “revolutionary” for younger Brits.

He said: “We need mortgages that will help people really get on the housing ladder even if they have only a very small amount to pay by way of deposit, the 95 per cent mortgages.

“I think it could be absolutely revolutionary, particularly for young people.”

The property market was one of the first financial fatalities of COVID-19 and has struggled to recuperate since restrictions lifted.

The longtime backbone of the British economy saw home values crash earlier this year, and they have slowly recovered.

UK house prices saw the most significant boost since 2016 last month, as they rose by five percent.

However, rising unemployment may scupper any further gains in 2021, leaving Conservatives eager to combat contractions.

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