Home Uncategorized Industry Insiders Warn That Government Intervention Is Making Things WORSE For First-Time...

Industry Insiders Warn That Government Intervention Is Making Things WORSE For First-Time Buyers


Housing Minister, Christopher Pincher, has written an article detailing how all of the positive changes implemented by the government are helping more people get on the housing ladder, but many industry insiders definitely don’t agree.

In an article written for Zoopla, Pincher says the government’s recent interventions in the housing market have made it much easier for first-time buyers to purchase a home.

The Minister is referring to such initiatives as the stamp duty holiday and 95% mortgages, both of which, he claims, are helping more people access the housing market.

“Polling has revealed that 69% of private renters and 63% of people living at their family home struggle to find many mortgages with a low deposit,” he wrote yesterday, adding that 95% mortgages “will enable more households to access mortgages on both new-build and existing homes, without the need for large deposits”.

In conclusion, he wrote: “As we build back better from the pandemic, we are determined to do everything we can to support first-time buyers and the housing market.”

It all sounds great for UK homebuyers, especially those who have long been priced out of the market, destined to be stuck in rented property for years, if not decades. 

“Oh the irony…”

However, while the message from the government is clear (we want more people buying, less people renting, and we’ve done great work to make buying easier for everyone), a lot of industry professionals have reacted negatively, suggesting instead that all of the intervention has actually made the situation much worse for first-time buyers. 

Commenting on a Property Industry Eye article that discusses the Housing Minister’s words, one insider wrote: 

“Oh the irony…Housing Minister trumpets about how ‘we are determined to do everything we can to support first-time buyers and the housing market.’ while at the same time his government throws petrol on the flames of house price rises via SDLT holiday etc.

“Let first time buyers be in no doubt – this government has very successfully made it harder and harder for people to get on the housing ladder at any truly ‘affordable’ level.”

A second insider wrote:

“The life cycle of a Housing Minister: make pledges, fail on pledges, run for the hills, find a new position…Repeat. Repeat. Repeat. Repeat….”

Is either side of the argument correct?

The truth is that both sides of the argument are right and wrong.

Yes, now that mortgages are available with just a 5% deposit,  and now that a significant tax break means thousands of pounds can be saved on a purchase, one could argue that the market is more accessible – people with less money can now think about buying a home. 

However, the intervention has done such a good job of incentivising buyers that demand is now far outweighing supply which is forcing house prices through the roof. Houses have never been so expensive in this country. It’s historic. And it means that those people with 5% mortgages still can’t afford to buy house prices are too high.

The only way that these government interventions would have genuinely helped more people buy homes is if the supply of housing was scaled up enormously. But there are very few signs of that happening, certainly not before December 2022 which is when the 95% mortgages are scheduled to disappear.

Today, being a first-time buyer trying to get on the market is like trying to buy toilet roll during a pandemic: You’ve got the money to buy it, but the shelves are always empty. 

Leave a Reply