THE housing market faces crisis unless the government tackles a “chronic” shortage of affordable homes, it is claimed.
The National Housing Federation, which represents housing associations in England, said a shortage of properties for low-income families was hitting home ownership and boosting rents.
But a Huddersfield estate agent disputed claims that there were too few suitable properties, claiming the problem was a “chronic shortage of mortgages at an appropriate loan-to-value level.”
Raymond Butterworth, of Boultons, said: “I would disagree that there is an under-supply of homes.
“There may be an under-supply of modern homes, but Huddersfield has a large stock of old terraced houses and there are plenty on the market. There is a good stock of first-time buyer houses around at the moment.
“The problem is the shortage of buyers who are able to find the required deposit.”
Mr Butterworth said the average two or three-bedroomed through-terrace could cost £75,000 to £100,000 depending on location – but with lenders typically seeking a deposit of 15% to 20% that left would-be buyers having to find £15,000 to £20,000.
Sellers reducing the asking price could help a little, Mr Butterworth said, but added: “What needs to happen is for the banks to open up on risk and start giving 90% to 95% mortgages on decent housing stock. At the moment, they are not available in great numbers and then only to ‘A1’ applicants.”
Paul Keighley, of Bramleys in Huddersfield, said the problem was the availability of mortgage finance at reasonable values.
“If there are any 90% mortgages, they involve high arrangement fees and the employer and credit history of the applicants has to be ‘A1’. A high proportion of sales fall at this last hurdle.
“Until 95% mortgages are available, the first-time buyer market will remain sluggish.”
Mr Keighley said many would-be sellers of typical first-time buyer properties were trapped in negative equity and would take a loss if they sold at current prices.
The NHF said the rate of home ownership had fallen in recent years due to high house prices, the need for larger deposits and stricter lending criteria set by banks.