Homeownership in US

The percentage of dwellings in America that are owned by their residents is referred to as the homeownership rate. By 2009, 67.4% of all dwelling units were owned by their actual owners, matching the rate of home ownership in post-industrial nations (Schwartz, 2014). The homeownership rate, however, varies according on the demographic characteristics of the homestead, such as race, ethnicity, settlement type, geography, and household structure. Quarter ownership was widespread in rural and suburban regions. Because it is less than 50% of the value of homes, home equity has decreased since the Second World War. The recent research and surveys, particularly in the urban centers, have indicated that the majority of citizens want to own homes but the house prices are rapidly rising each year which hinders potential buyers to afford the cost (Jones, White, & Dunse, 2012). Nevertheless, the government can assist more people to qualify for homes by introducing and promoting different activities such as the right to buy, help to buy, preventing repossessions, shared ownership and buying new-build quarters.

HELP TO BUY

The help to buy is the strategy that supports individual’s aspirations to possess home by providing the leg-up to citizens who can muster about five percent deposit. The program should be aimed at first-time buyers so that to amplify the number of people who qualify for houses. Further, three schemes can be included in the help to buy policy which includes the mortgage guarantee, equity loan, and NewBuy (Bergstein, 2014). Initially, the equity loan scheme should provide certain amount of money based on the ground logistics for the additional investments so that to assist people to buy houses. The loan should be made available to all individuals who aspire to buy a newly built home and have the deposit of five percent. To implement the equity loan plan, the government must offer a mortgage worth at least twenty percent value of the new building and interest free for a long period such as five years (Belsky, Herbert, & Molinsky, 2014). Moreover, the administration should significantly expand the eligibility conditions to make sure that many people are able to benefit.

Besides, the mortgage guarantee policy would assist citizens to buy an existing property or newly constructed homes. The scheme must be made open to existing homeowners and new buyers. Further, the mortgage guarantee must not be available to people who are willing to purchase a second homestead or the buy-to-let house so that to help homeless people have the chance of having a house (Norberg, 2012). The guarantee secures the lender against the losses since the borrowers remain responsible for the mortgage payment as well as any shortfall. In return, the lenders will pay the administration a commercial fee for every mortgage guaranteed which should cover the expected price of the scheme for the taxpayer. The NewBuy should resemble that of the United Kingdom which enables all households both the new and old buyers to have new houses (Bergstein, 2014). However, the strategy should be industry-led and open to lenders and builders operating in the country.

Furthermore, the regime has to encourage shared ownership were social tenants, and first-time buyers can purchase home. The shared ownership strategy permits citizens to buy the first share of the house and pay rent on the remainder to the housing organization (Berg & Braun, 2016). The shared ownership must be aimed at the first-time purchaser who cannot access the property suitable for their requirement without the fiscal boost. The eligibility criteria for the shared ownership scheme must be adjusted to accommodate all people from different social-economic classes so that to increase the number of house owners.

PREVENTING REPOSSESSION

Preventing reclamation entails a range of measures that assist homeowners in fiscal difficulties. Research has shown that the threat of repossession is real for homestead owners across the urban center thus the government must be committed to secure the vulnerable (Berg & Braun, 2016). Foremost, the administration should allocate funds to all local housing organizations in the country to provide small interest-free credits to households that have high chances of repossession so that to help with particular debts and address immediate short-term fiscal issues. Secondly, the government should boost the mortgage interest that is paid as a portion of department for pension and work benefits to assist people who are working meet their monthly profit payments (Belsky et al., 2014). Further, the free legal representation and advice have to be funded to assists individuals facing reclamation. The mortgage pre-action procedure has to be put by the court and lenders must prove that they have exhausted each possible choice before applying for the recuperation order.

RIGHT TO BUY

The focus on the right to procure scheme would offer qualified individuals who stay in urban centers or council possessions the right to acquire their houses at a price cut. The plan must be open to populace who are safe tenants of the local council and have spent at least five years as the civil sector renter. Additionally, residents of housing organization that had tenancies when their homesteads were transformed from the local council to the housing body have to be included in the right to buy policy (Bergstein, 2014). Further, the government has to alter the caps on the right to purchase discounts so that to encourage more people to embrace the right to buy policy. The maximum discount that a buyer can obtain the market value of their households must be increased. Moreover, extra homes that are sold under the right to buy scheme must be surrogated with new home for reasonable rent nationally with the cash from extra sales put towards the expenses of replacement (Berg & Braun, 2016).

Additionally, the provision to cover some of the fees of the withdrawn applications has to be made so that councils in the entire country can retain some cash per sale. Furthermore, the buyback provision has to be retained following the representation from councils. The changes to the qualifying criteria for the right to buy and the preserved right to purchase must be implemented where people who have served for few term such as three years as a public servant can procure homes (Norberg, 2012). In addition, the cost floor should be retained and extended up to fifteen years so that to decrease discount if landlord has used money in maintaining or building the home for the past fifteen years so that to make sure that the house owners cannot sell homes with losses. The local councils must be allowed to sign the agreement that utilizes the money from extra municipal home sales in their regional areas for one-for-one replacement (Belsky et al., 2014).

References

Belsky, E. S., Herbert, C. E., & Molinsky, J. H. (2014). Homeownership Built to Last: Balancing Access, Affordability, and Risk after the Housing Crisis. Cambridge, Massachusetts: Brookings Institution Press with the Joint Center for Housing Studies of Harvard University.

Berg, L. van den, & Braun, E. (2016). National Policy Responses to Urban Challenges in Europe. New York: Routledge.

Bergstein, S. (2014). UK Government ‘Help to Buy’ scheme: A policy of genius or economic idiocy? London: GRIN Verlag.

Jones, C., White, M., & Dunse, N. (2012). Challenges of the Housing Economy: An International Perspective. Chichester: John Wiley & Sons.

Norberg, J. (2012). Financial Fiasco: How America’s Infatuation With Homeownership and Easy Money Created the Financial Crisis. Washington, DC: Cato Institute.

Schwartz, A. F. (2014). Housing Policy in the United States. New York: Routledge.