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September 10, 2010    

Redrow chairman campaigns for first-time buyers

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by Gill Montia

Redrow chairman, Steve Morgan, is calling attention to the plight of first-time buyers, pointing out that they are forced into saving upwards of 20% of the value of their first homes, compared with an historic first-time buyer deposit of around 6%.

With demands for large deposits remaining “the major constraint” to the full recovery of the UK housing market, Mr Morgan is urging the Government to intervene, possibly by way of an insurance indemnity scheme that could enable lenders to provide up to 95% loan-to-value mortgages to those wanting to get a foot on the property ladder.

The chairman comments: “Young people need help to get onto the housing ladder one way or another and it is a sad reflection of our society that the average age of an unassisted first time buyer is now 37 years old, with the latest report from the National Housing Federation suggesting that this will increase to 43 for today’s 21 year olds.”

In presenting the house builder’s preliminary results, Mr Morgan also confirmed that the group’s cancellation rate remained fairly consistent during the 2009/10 financial year at 17%.

However, he added: “The overwhelming cause of cancellations was the chronic shortage of suitable mortgage product, combined with the persistent and ongoing issue of down valuations by valuers acting for the mortgage lenders.”

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