HSBC joins £12bn Help to Buy plan with bank to offer mortgages worth up to 95%

 

HSBC provided a major boost to the Government's Help to Buy scheme when it confirmed that it would begin offering mortgages worth up to 95 per cent of property values under the initiative.

It is the first major lender outside state-backed banking groups Royal Bank of Scotland and Lloyds to announce participation in the £12 billion programme.

Taxpayers will guarantee up to 15 per cent of a property's value, in return for a fee charged to lenders, allowing homebuyers to purchase with deposits as low as 5 per cent. Some estimates suggest 180,000 loans could be taken out under the initiative.

Estate agent Haart predicted Help to Buy would boost property transactions by 10-15 per cent in the next 12 months and reduce the average deposit required by first-time buyers from £33,948 to £7,218.

The scheme - brought forward by three months despite fears of a housing bubble - had until now been backed only by brands controlled by RBS and Lloyds, together with smaller players Virgin Money and start-up Aldermore.

The Treasury said these banks represent more than 30 per cent of the market. HSBC said it had a market share of 13.6 per cent of new mortgage approvals in 2012.

It is now planning to offer Help to Buy mortgages between 90 per cent and 95 per cent loan-to-value (LTV) later this year through its branch network.

Antonio Simoes, head of HSBC UK, said it promises to beat or match rates from high street competitors at 90 per cent LTV.

"By participating in Help to Buy, we will go further and offer mortgages up to 95 per cent LTV," he said.

RBS and its NatWest subsidiary are offering two and five-year fixed-rate deals at 4.99 per cent and 5.49 per cent with no fee and the brands expect to sign up 25,500 first and next-time buyers over the three-year scheme.

The two lenders are extending opening hours at 740 branches for two weeks to cope with expected demand and the Treasury said a flood of interest was expected.

Customers can get information from these banks today and start applying for their Help to Buy mortgages from tomorrow.

At Lloyds-owned Halifax, customers can begin applying from Friday for products including a two-year fixed-rate deal at 5.19 per cent with a £995 product fee. Another Lloyds brand, Bank of Scotland, will also take part, though not Lloyds Bank.

Virgin and Aldermore are due to take part from January and the latter is exploring whether the date can be brought forward, the Treasury said.

PA

Start your day with The Independent, sign up for daily news emails
News
Disruption at Waterloo after a person was hit by a train
newsCancellations and disrupted service after person hit by train
Arts and Entertainment
music
Arts and Entertainment
The almost deserted Liverpool Echo Arena on Monday
tvCan X Factor last in the face of plummeting numbers auditioning
News
Kirsty Bertarelli is launching a singing career with an album of songs detailing her observations of “real life”
news
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

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: Photographer / Floorplanner / Domestic Energy Assessor

£16000 - £25000 per annum: Recruitment Genius: A Photographer/ Floor planner /...

Ashdown Group: Front-End Developer - Surrey - £40,000

£30000 - £40000 per annum: Ashdown Group: Front-End Developer - Guildford/Craw...

Recruitment Genius: Customer Service Assistant

£13500 - £15000 per annum: Recruitment Genius: A Customer Service Assistant is...

Recruitment Genius: Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An ambitious and motivated Sale...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence