Help To Buy Scheme Brought Forward
The Prime Minister David Cameron announced this week that the second phase of the Help To Buy scheme will now be rolled out next week. The scheme was due to be started on 1st January 2014.
The second phase sees the state guarantee 15% of a mortgage, meaning buyers only needs to put up 5% of a property’s value. Earlier this year in April the first phase was launched and offered loans to give people the chance to buy a new-build home with a deposit of only 5% and some people have said this was the reason for the recent rise in home sales and increasing prices.
The Prime Minister hopes that by bringing the scheme forward it will help ignite economic recovery sooner. He said, “I am not going to stand by while people’s aspirations to get on the housing ladder are being trashed. If we don’t do this it will only be people with rich parents to help them who can get on the housing ladder – that is not fair, it is not right.”
So far mortgage-lenders including Royal Bank of Scotland, Lloyds, Nat West and Halifax have already signed up to the Help To Buy scheme, with other big lenders still undecided as to whether they will take part too. RBS and Nat West have even said that they will keep some branches open later as they are anticipating huge demand.
The scheme is not without its critics as some say it will lead to a housing bubble and Business Secretary Vince Cable has recently called for it to be scrapped altogether due to fears it will lead to an unsustainable boom in house prices.