So the house builders and the lenders have had a meeting to discuss how they can create 95% mortgages. Basically a good thing, as you would imagine most estate agents would say. But what proportion of the housing Market is represented by new homes sales to first time buyers? Also any first time buyer who purchases a new home is then a cost to the second hand Market of who knows how many sales!
If I think back 30 years my wife and I as first time buyers were providing a deposit of 10%. To do this we sold her car, saved up by not going out as much and generally committed ourselves to the task of buying our first home together. Ah, you might say, but house prices were so much cheaper then. True but my salary was just under £2,000 per annum with the prospect of perhaps another £1,000 in commission from selling at lease 6 houses per month personally. The first 4 didn't count towards commission but were to cover my costs to my employer!
I personally don't think 95% mortgages are what it's about. 90% is OK but today's first time buyers have to seriously want to do it! If that makes me sound old-fashioned then so be it. At least today's FTB's are not contending with galloping house price inflation. Qualifying for the mortgage is another can of worms. Freely available credit has enabled lots of youngsters the opportunity to get themselves a bad credit rating. The first whiff of this sort of problem and an application is rejected. Broadly this is seen as reigning in 'bad lending' but we have seen the extremes where minor misdemeanours create the same rejection.
The only way the Market as a whole will be motivated again is for reasonable lending to be restored - not just to to the new homes Market!