It is to be announced today that the Welsh Liberal Democrats’ first-time buyers mortgage guarantee scheme will be rolled out in the Spring of 2013.
During budget negotiations with the Welsh Government last year, the Welsh Liberal Democrats insisted that their mortgage guarantee scheme would be introduced to assist first time buyers, as well as offering a boost to the housing industry.
The three and a half year scheme, which will be run in partnership with house builders, will be available to all buyers in areas of housing pressure and first time buyers across Wales and will support the purchase of up to 3,000 new build homes up to value of £250,000. Rather than funding being made directly available to buyers, the Welsh Government and house builders will act as guarantors so that buyers can secure high loan to value mortgages that would not otherwise be available to them. Buyers will contribute a 5% deposit.
The scheme, which the Welsh Government is supporting with a £27m guarantee, could enable an investment in housing of up to £500m within a three year period.
Should homeowners default on the loan, any losses would be covered by any equity they have in the property in the first instance, followed by the house builder’s indemnity fund, which equates to 3.5% of the loan value. The Welsh Government would be third in line to make good any losses.
The Welsh Liberal Democrat mortgage scheme will give much needed assistance to potential house buyers who need help with their up front deposit, whilst at the same time it will stimulate the economy and boost jobs in our construction sector.
The lack of action from the Welsh Labour Government regarding the building of new homes has kept prices at unaffordable levels. Demand has continued to outstrip supply, which has only added to the problems faced by first time buyers in getting onto the housing ladder. It is for this exact reason that the Welsh Lib Dems ensured our mortgage guarantee scheme would be introduced. It will be of immense help to people that want to own their house and can afford the monthly repayment, but cannot gather the deposit necessary.
Welsh Liberal Democrats recognise that public finances are tight, but the Welsh Government needed to think outside of the box when starting to tackle the housing problem – we have ensured the Welsh Labour Government has done just that.
Whether it be extra money for Wales’ poorest pupils, our Innovative Drugs fund – which the Welsh Government has pledged to look at further – or today’s mortgage scheme, the Welsh Liberal Democrats are making a massive difference to the lives of the people of Wales. The Welsh Liberal Democrats may not have agreed to do a deal with the Welsh Government last week, but we have ensured that the party’s influence will continue to be felt for years to come.