PM’s new 95% LTV mortgages will ‘add two million owner-occupiers to market’

But commitment by Boris Johnson to introduce fixed-rate long-term mortgages for FTBs gets mixed response from industry.


Boris Johnson has revealed that his government will bring forward proposals to introduce fixed-rate long-term mortgages to enable first-time buyers to purchase homes via 95% LTV mortgages.

The Prime Minister claimed that the initiative would add two million owner-occupiers to the housing market and fulfil one of his party’s key 2019 election manifesto promises.

He said during his speech to the Conservative’s virtual national conference: “For most people it is still true that the overwhelming instinct is to buy.

“But for many of them simply can’t, not because they can’t afford the mortgage but because they can’t afford the deposit.

“The disgraceful truth is that home ownership levels in this country have plummeted and that many are forced to pay through the nose to rent a home they can’t truly love or make their own.

“This policy will create two million more owner occupiers – the biggest expansion since the 1980s of home ownership, to every part of the country.”

Industry reaction

Mark Hayward, Chief Executive, NAEA Propertymark

We welcome the Prime Minister’s comments today which shows a positive change in tone by promoting a generation of renters to become a generation of buyers. We encourage lenders to come on board and support this initiative to enable first time buyers to enter the property market by future proofing the financial burden many face.”

“We want to see intent become action quickly so that first time buyers can make the most of the current stamp duty holiday and continue to stimulate the housing market.”

David Alexander, Apropos

Link to Oursourcing feature mortgages“The proposal by the Prime Minister to offer a 5% deposit mortgage scheme for first time buyers to “fix our broken housing market” sounds superficially appealing but ultimately does not bear much scrutiny. Offering mortgages to individuals which lenders already regard as high risk has the potential to land people with future negative equity.

“No-one would doubt that the intention is well meant but the execution could result in many individuals acquiring unwanted and unsustainable debt in the years to come.”

Rob Houghton, reallymoving

“We support the Government’s efforts to reduce barriers for First Time Buyers and welcome the return of 95% mortgages with caution.

“High loan to value mortgages do come with risks but there is a place for them in today’s market as long as first time buyers are educated and informed about what could happen if prices fall.”


Marc von Grunherr, Benham & Reeves

Marc von Grundherr image“Creating two million more homeowners is a lovely bit of rhetoric for Boris to fuel market sentiment, but it comes with a clear and obvious problem. Where are they going to live?,” he says.

“Yes, the affordability of homeownership is a problem at present and providing buyers with a foot up via a smaller deposit will help many to overcome this hurdle. In the more inflated markets such as London, it reduces the deposit required by some £25,000 and so the initial saving is notable.

“However, we’re simply not building enough homes and the Government’s head in the sand approach to this burning issue is going to bring about problems when those securing these new mortgages actually look for a home.”

Ian McKenzie, Guild of Property Professionals

Link to Stamp Duty feature“Is what Boris proposing a good idea for the market? One could argue that it is a very good idea based on the fact that the UK is teetering on the brink a substantial recession, possibly as bad as the 1930s, and any stimulus that promotes growth and income generation for the wider economy has to be positive,” he says.

Watch the speech in full.


  1. Given that the SDLT holiday introduced by Boris, or rather his Chancellor of the Exchequer has fuelled rampant house price inflation, increasing values in some areas by 10% and causing gazumping, it is interesting that the concept of 5% deposits will cure anything for the first time buyer. As to fixed long term, low interest rate mortgages, given the present base rate, this is hardly a new feature either.

    The country under supplies year on year the amount of new homes required, and with WORK undergoing a significant change – as in what it is, who does it and where, all shaped by the new technologies sweeping through our country’s infrastructure, maybe for those not yet on the housing ladder the government would do better to forget the soundbites and actually do some long term thinking.

  2. Like Rob at Really Moving I very much support the Government’s effort to reduce these barriers. There is no doubt that the restriction of high LTV products for First Time Buyers over the last few months has prevented people from entering the property market, as well as having the effect of slowing down transactions due to lengthy mortgage approvals. Of course people have to be sensible in their financial commitments especially in a world where property prices are dependent on the post-pandemic economy, but housing has always proved a good long term investment. And at least the interest rate is not 17% like it was in 1981 !!

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