Help to buy now while stocks last

It looks as if there could be an eight or nine month window of opportunity to get involved in the second prong of Help-to-Buy.

Up until now there have been loans available on new build, but the real blockbuster part of the scheme comes into being from January next year – only a few months away.

The second strand will see around £130bn of taxpayer money offered as guarantees to any borrower with a small deposit or low equity in an existing home to buy first time or move up the property ladder. The state will guarantee up to 15% of a mortgage worth up to £600,000.

If you are struggling to buy and perhaps even more frustratingly struggling to move, then you may need to get your skates on. The Chancellor George Osborne has been beset by criticism that he could be creating a house price bubble, most recently by the Shadow Chancellor Ed Balls at the Labour party conference.

Osborne now says that a powerful Bank of England committee – the Financial Policy Committee will review the scheme in September 2014. It can cut the cost of the properties these sums can be loaned on i.e. reduce it from £600,000. It can also put up the fees not for the end borrowers but because of the way the scheme works for the banks and building societies, which participate. That could reduce the flow of money to the market to a trickle.

So what does it mean for individuals?

It is common sense, but sometimes difficult not over stretch yourself no matter how dreamy your dream home.

It is mostly up to you to assess this although lenders and any broker will get involved too in discussing affordability with you too.

We suspect that very many people in the UK – especially those outside Northern Ireland where prices have halved – are convinced that house prices are still something close to a one-way street.

They may be doing all in their power to get on that first rung of the housing ladder. We could therefore see a mini-boom in the first nine months of 2014 to add to what many people say is a real boom already.

Then the FPC, doing what it has been tasked with doing may head off risks to the system by effectively shutting the scheme.

And if the Bank of England is wrong about inflation and unemployment it may be a double blow.

Now I am not an economist, though we have heard the thoughts of our star economist Shaun Richards in recent weeks on the housing move.

But short sharp boosts to the mortgage and housing market followed by a cut off does not really sound and feel like sound policy.

It does neatly avoid a Government U-turn. But in the capital at least with prices up at 10%, we wonder if adding any more energy to this bubbly mix can help.

We wonder if the scheme would have been announced at all, if the Government had foreseen the recovery in the housing market.

That is the policy bit. But, individually if you are struggling to move, this scheme could be just the ticket. Maybe you should think ahead and do a mini-version of what the FPC is going to do and stress test your own finances as it stress tests the impact on the housing market next year.

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