SOS for first time buyers

At the moment many young couples are finding it very difficult to find a property in the open market which they can afford.

Recently the National Statistics Office published for the first time the property prices index. This index shows that the price of property in general rose by 13.48 per cent when comparing the first three months of last year with the same period this year. In this period, the prices of apartments rose by 14.19 per cent, those of maisonettes were up by 18.62 per cent and terraced houses by 17.34 per cent.

My focus on apartments, maisonettes and terraced houses is obvious due to the fact that these types of property are the most sought after and the most affordable in our country.

This rise in property prices does not come as a surprise because everyone is aware of how expensive property is but it was never official as it is now. The property prices index is based on data from contracts of sale filed in the Public Registry.

Personally, I believe property prices are much higher than what appears from the index because it seems to have become a tradition in our country to declare in the contract of sale a price inferior to the one actually being paid.

Everyone is concerned about this gradual and constant rise in property prices. Over the past four years the value of property in general rose by 43 per cent. Apart from politicians, the Church has also spoken out against this precarious situation. The Archbishop is worried and feels that the government should intervene especially in humanitarian cases where certain people can never have sufficient income to ever pay for an apartment or flat.

As a member of Parliament I have on various occasions spoken about this situation but to no avail. Once again I urge the government to find a solution especially for first time buyers who are usually couples intending to marry or cohabit, single and separated parents who all would like to have a secure future.

I have on various occasions offered my experience and cooperation to the Nationalist government even though I come from the Labour side. I propose that all the stakeholders unite and come up with one national policy to help first time buyers be able to afford their first home.

Although the banks offer good interest rates and good conditions for home loans, property prices in Malta are still unreachable when one considers the meagre salaries many Maltese workers earn. This is causing frustration to many young people who feel they will never be able to own their own home unless they are helped.

The Chancellor of the Exchequer, Gordon Brown, announced just days ago that the government would offer financial assistance to young couples buying their first home. Mr Brown said the government would partially pay out the loan the couples would not otherwise be able to take out. Thus, if a couple can only pay a certain amount per month, the rest of the monthly loan will be paid by the government. In certain cases, couples may even have the privilege of paying only half of the cost of their new home.

Of course, there are conditions which have to be observed. However, this help will not be limited to key public sector workers, as is usually the case, and there will not be any means test. The deserving applicants must be able to repay the monthly commitment made.

The way in which the British government is proposing to financially assist first time buyers is quite innovative and could serve to inspire the Maltese government in its policy on property, or so I hope!

Dr Buontempo MP is the Labour Party's spokesman for housing.