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
Sunday 29 September 2013
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.
sportLiverpool 5 Norwich City 1: Uruguayan striker has now scored 11 league goals against the club
arts + entsOlivier-nominated actor and singer is set to star in Lloyd Webber's musical about the Profumo affair
filmWith more than 70 per cent of early films lost, archivists are scouring the world to preserve the precious examples that remain
sportUnder-10s football coach sacked for telling parents he was 'only interested in winning'
techA piece of new hi-tech kit aims to get us scribbling again
indybestMake getting out of the wrong side of bed on cold winter mornings a thing of the past with our selection of night-time covers
life + styleClarissa Baldwin is the brains behind the slogan 'A Dog is for Life not just for Christmas'
Work until you’re 70: Chancellor George Osborne accused of ‘living in fantasy land’ over Autumn Statement pension reforms
What made Charles Saatchi grab my throat outside Scott's, by Nigella Lawson - as she accuses him of threatening to 'destroy' her with drug claims
Is this the scariest advert ever? Japanese tyre commercial comes with its own disclaimer and health warning
‘Put it in my mouth’: Viewers outraged by apparent reference to oral sex in VIP e-cig advert
Paul Walker death: Eight-year-old son of Porsche driver Roger Rodas tried to rescue his father
- 1 The hardwired difference between male and female brains could explain why men are 'better at map reading'
- 2 Is this the scariest advert ever? Japanese tyre commercial comes with its own disclaimer and health warning
- 3 A forgotten episode in Russian history leaves links with the Philippines
- 4 Syrian rebels consider joining forces with regime troops to fight al-Qa’ida
- 5 ‘Put it in my mouth’: Viewers outraged by apparent reference to oral sex in VIP e-cig advert
£50000 - £70000 per annum + London: Harrington Starr: Senior Automation QA Eng...
£35000 - £50000 per annum + Benefits : Harrington Starr: SQL 2008 R2/2012 Deve...
£38000 - £45000 per annum + Benefits: Pro-Recruitment Group: Creative Audit Se...
£45000 - £50000 per annum + Benefits: Harrington Starr: SQL Developer (TSQL, P...