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Comment: A homeless elephant in the room?

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It is still hard to see how the Government will meet its target of two million first-time buyers by the end of this Parliament

The outlook for first-time buyers appears to be the brightest of all borrower segments right now.

Our latest research found brokers and lenders agreed that the first-time buyer market would steer ahead of homemovers, remortgagors and other segments in terms of growth opportunities.

We published a white paper earlier this year showing mortgage affordability had hit a new high thanks to the cheaper deals available and, to top it off, first-time buyer mortgage repayments were lower than average rents in every UK region. So why on earth are would-be first-timers still renting?

Quite simply, there is much more to be done, not least in pressured areas such as London and the South-east. Mortgages may be cheaper but higher deposits due to higher house prices are holding back buyers. Once again, this draws attention to the elephant in the room: a very real housing shortage. And let us not ignore the possibility of rent rises resulting from continuing buy-to-let reform, which could propel landlords to hike rates.

We await the Redfern Review for the latest number of homes needed every year to keep up with demand, and a more thorough investigation into what is holding back first-time buyers.

With the Starter Homes scheme still stuttering into life and the planned cessation of Help to Buy 2 at the end of this year, it is still hard to see how the Government will meet its target of two million first-time buyers by the end of this Parliament.

Peter Williams is executive director of the Intermediary Mortgage Lenders Association

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