2nd January 2014
Less than 3 months on from the start of the Government’s Help-to-Buy mortgage guarantee scheme, more than 6,000 people have put in offers on a home and applied for a mortgage, Prime Minister David Cameron announced today.
Already nearly 750 homeowners have completed their purchases according to figures from the Treasury.
The mortgages, once approved, would represent nearly £1bn of new lending to aspiring home owners who may have previously found the property market out-of-reach because of the size of deposit required.
Help-to-Buy was established by the Government in a bid to give those struggling to get on the housing ladder a leg-up.
Under this system, would-be property owners can put down a deposit as small as 5% for homes up to a value of £600,000. Mortgage lenders who sign up to the scheme, pay a fee to the government, which will in turn guarantee 15% of the loan value.
Barclays and Santander will introduce their own Help to Buy products onto the market this month, joining Lloyds Banking Group, RBS, HSBC, Virgin Money and Aldermore who have all launched products over the past three months.
The expansion will mean two-thirds of the entire UK mortgage market will offer products under the Help to Buy scheme.
Prime Minister David Cameron says: “The New Year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder. But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.
“That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home. In less than 3 months, the scheme has already helped thousands of people. I want to see that continue in 2014 and for Help to Buy to help thousands more realise their dream of home ownership.”
Emma Reynolds MP, Labour’s Shadow Housing Minister, responding to updated Help to Buy figures, says: “Any help for first time buyers struggling to get on the property ladder is to be welcomed. But rising demand for housing must be matched with rising supply if this scheme is to bring the cost of housing within the reach of low and middle income earners.
“Instead under this government housebuilding is at its lowest level since the 1920s. You can’t deal with the cost-of-living crisis without building more homes. That’s why Labour has committed to building 200,000 homes a year by 2020.”