UK’s Budget: Do the new schemes really help young people out of struggle?

The young generation who has problems with purchasing a house will be affected by this year’s government budget.

 Chancellor Rishi Sunak unveiled his budget on 3rd March. Photo by Annie Spratt on Unsplash

Chancellor Rishi Sunak released the government’s 2021 Budget on 3rd March. There are two schemes launched for stimulating house purchase.

The first one is the new Mortgage Guarantee Scheme which will provide 95% loan-to-value mortgage products for first time buyers. People only need to pay 5% of the property as a down-payment.

The second one is the extension in the Land Transaction Tax (similar to the Stamp Tax in England) reduction period only in Wales which means before 30 June there is no tax payable on property sales below £250,000.  

According to these two schemes, the cost of buying property will be reduced. However, do these policies really encourage young people in Wales to buy a house or help them out of the impact caused by the pandemic? 

We interviewed six young people who live in Wales to share their stories and opinions about these two schemes.

Jessica, 22
Jessica: Policies will encourage me to buy a house but not now.

“I think it would maybe encourage me to buy a house in the future but not now because they are so expensive and I probably won’t get one until later in life. As for the land tax one, I think that would be useful as it’s been reduced again probably something I won’t consider for at least another few years.”

Gethin, 23 

Gethin: The policies help young people who don’t want to rent a house to buy their own house.

“I think it’s probably a good idea. You’ve got to put less of the deposit and it’s more attainable for young people to get that money. So I guess, if you’re looking to buy a house, it is beneficial because you get a bigger mortgage from the bank. It saves you having to rent if you don’t want the rent.”

Katie, 22 

 Katie: The policies will help, but young people should have enough deposit.

“I completely agree and I do think it will encourage people. But again, they have to have the money to be able to afford the deposit slower. But I do think it can encourage people to do it.”

Sophie, 22 

Sophie: Maybe it will attract some students to buy a house.

“Yes I think with the current pandemic at the moment, people are looking to rent and buy. Because house prices have dropped a lot with the current pandemic. So that might interest people to buy. Like the lower costs would definitely intrigue students to buy.” 

Katie, 20

Katie: The schemes sound justifiable but for young people renting a house is a more realistic way.

“In general I think it just sounds more justifiable. Personally, I wouldn’t be able to afford to buy a house at the moment. So at the moment, down to just rent is a more realistic way of living. So for younger people, I think it’s more about just getting by until we have that stability.”

Merin, 20 

Merin: These policies will encourage my family and some young people to buy a house.

“My brother is turning 23 this year, he has got a stable job so he is looking to buy a house. He had looked into renting it but I think until this new policy had come in, he then started to get into the mindset of buying one. And I do think it is encouraging me and my whole family, probably a lot of other young people, to start looking at buying a house.”