Shapps calls summit over first-time buyer mortgage crisis

Mortgage lenders, house builders and industry leaders are being summoned to an emergency meeting to discuss the plight of first-time buyers.

The meeting is being called by the Government which says that first-time buyers have been frozen out, with an impact on the whole of the rest of the housing market.

Deputy prime minister Nick Clegg said that the crisis is ‘hampering social mobility’.

The summit will be held in London on February 15 and chaired by housing minister Grant Shapps.

Problems faced by first-time buyers include the large debts with which they leave university, the high deposits routinely required by lenders, and the increasing likelihood of interest rates rising.

According to the Council of Mortgage Lenders, the proportion of first-time buyers under the age of 30 who are able to buy without parental help has fallen from 63% five years ago to 17%.

In the last three quarters of 2010, the proportion of mortgages granted to first-time buyers with deposits of less than 10% fell to two in 100, down from almost six out of ten in 2005.

The average age of an unassisted first-time buyer is now 37.

Treasury spokesman Lord Oakeshott accused mortgage lenders of being virtually ‘on strike’ when it came to lending to first-time buyers.

He said: “The bankers’ doors are shut to first-time buyers without a big helping hand from the Bank of Mum and Dad.”