The government has recently announced that they will invest another £2.7 billion this year, into affordable housing.
The 2 main reasons are as follows:
- Save thousands of construction jobs.
- Increase the supply of new affordable homes and therefore make housing more affordable for first time buyers.
This scheme is part of the £8.4 billions of the National Affordable Housing Program which started in April 2008, which runs over 3 years. The government are looking to act quickly by investing this money into the housing sector to minimise the negative repercussions of a stagnant construction sector. It is likely that the government will spend it’s entire affordable housing budget this year.
The government are forced to take this action as banks are still unwilling to lend money to the average first time buyer and low to middle income earners. If you do not have a substantial deposit banks are not likely to lend to you, unless are a long term, high income earner.
This scheme looks to be a practical way of stimulating the economy and encouraging people to purchase homes they can afford. Hopefully in the future, people will be more conservative when buying homes, hence reducing the likelihood of another financial crisis.
Part of the reason we are in a credit crunch is that people borrowed more than they could afford to repay. Although there are many other reasons we are in now in a depression.
So encouraging people to purchase affordable housing appears to be a good step forward.
Do you think that the affordable housing scheme is a good way to spend tax payer’s money?