Sharon O’Callaghan, head of sales for the London Mortgage Company, said the lack of FTBs entering the market remained one of the biggest unresolved issues for the mortgage market and without them the market would stagnate.
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O’Callaghan stated that it was difficult to know how to solve the problem, but the government should look to reintroduce MIRAS for FTBs.
The government originally began to restrict mortgage interest relief from 1988 onwards and it was completely abolished in 2000.
Sharon O’Callaghan, head of sales for the London Mortgage Company (LMC), said: “If the bottom rung of homebuyers is not there because house prices are too high for them to get on the property ladder, the market is not sustainable. FTBs are needed. Of course, the problem would be how do you determine who is a genuine FTB? Affordability is such an issue and lenders are trying to adapt the amount of money they can lend, but will it catch up with rising house price?”
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However, Ray Boulger, senior technical director for John Charcol, commented: “I don’t see the government bringing it back, after it phased it out over such a long time. There are all sorts of difficulties in having some kind of subsidy for first-time buyers and whenever the government gets involved in the mortgage market it is a fiasco. First-time buyers do need help, but I would rather see the private sector come up with a solution targeted to FTBs but not limited to them.”
