Tories bring forward Help to Buy: Young Britons to get 95% mortgages next week

In a dramatic start to the Conservative party conference, David Cameron accelerates plans for state-guarenteed house buying by around three months

The flagship Conservative Help to Buy mortgage scheme will be rolled out next week – a full three months earlier than originally planned, Prime Minister David Cameron has revealed at the start of the Tory party conference.

Labour has warned that the new plans will lead to a new housing bubble, with the Government making it much easier for people to afford a deposit on homes worth up to £600,000.

The second phase of Help to Buy sees the state guarantee 15 per cent of a mortgage, meaning buyers only needs to put up 5 per cent of a property’s value.

The Shadow Chancellor Ed Balls warned of “soaring prices” which would ultimately make it harder rather than easier for first-time buyers to get on the property ladder.

But on the eve of his party conference getting underway in Manchester, Mr Cameron said that as things stand people who “don’t have rich parents” – even those with good jobs and solid prospects – are still unable to afford the most modest first homes.

The scheme will see the Government taking on the bulk of the risk of high loan-to-value mortgages, encouraging lending with state guarantees of up to £12 billion on £130 billion-worth of homes.

Speaking in an interview with the Sun on Sunday, Mr Cameron said: “I am impatient to help young people get on the housing ladder.

“The need is now. I have always wanted this to come in and frankly the earlier the better.

“What concerns me is that you can't buy a house or a flat even if you are doing okay, you have got decent job prospects and good earnings.

“I am not prepared to be a Prime Minister of a country with caps on aspiration.”

Liberal Democrat Business Secretary Vince Cable joined Mr Balls in his scepticism about Help to Buy, warning it “could inflate the market” and adding that he feared there was a “danger of getting into another housing bubble”.

Former Bank of England governor Lord King also said the scheme is “too close for comfort” to a general scheme to guarantee all mortgages.

Mr Cameron dismissed these concerns, and said people outside London “laugh, quite rightly, in your face” at the suggestion there is a housing boom.

He said: “Look at the number of first time buyers - it is still almost half what it was before the difficulties that we faced. The number of mortgage approvals is still way below where it was.

“Don't take it from me, take it from the Bank of England who looked at this last week and said there isn't one.”

Speaking to the BBC, Conservative party chairman Grant Shapps confirmed that the scheme was backed by – and would be under the control of – the Bank of England.

Mr Shapps said that it would only run for an initial three years, and that the Bank had the power to pull the plug on it at any time.

The first stage of Help to Buy was launched in April and offers loans to give people the chance to buy a new-build home with a deposit of just 5 per cent. The scheme has been credited with spurring a surge in home sales and driving up prices.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test