Downing Street has advised that the Help to Buy Mortgage Guarantee scheme had aided almost 750 house purchases since it was introduced in October 2013.
The scheme, which is available across the whole of the UK, was introduced in order to give people the opportunity to purchase a residential property with a deposit as low as just 5% of the total cost.
The scheme has since sparked large debates, with Liberal Democrat Vince Cable recently suggesting that the scheme should be reviewed in consideration of a “raging Housing Boom” in London the South East.
To counter Cable’s opinion of the scheme, Prime Minster David Cameron expressed his views that the scheme prevents potential homeowners from being frozen out of the property market.
After releasing figures from the start of the scheme up to 18th December, the government advised that the first few months of the scheme has aided the purchase of almost 750 homes, whilst approximately 6000 people had made offers on properties with the help of the mortgage guarantee scheme.
The figures originated from data released by RBS and Lloyds Banking Group, both of which have been participating in the scheme since it launched in October 2013.
However, Cable advised before Christmas that the scheme was introduced in “very different circumstances” and should now be re-examined to prevent an unattainable raise in prices following increased demand for property, specifically in London and the South East.
He said “There is a raging housing boom in London and the South East - not in other parts of the country."
Cable advised that failure to re-assess the scheme could cause the property boom to get out of control unless there was a rise in interest rates, which would have a negative impact on areas of the country where the housing market has not fully recovered from the credit crisis in 2008.
In contrast, The Labour Party housing minister Emma Reynolds advised that house building needed to be increased in order to aid the scheme’s success.
Reynolds said “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."
Under the Help to Buy Mortgage Guarantee scheme, the government will provide the mortgage lender with a taxpayer backed guarantee of up to 15% of the property’s value, which lowers the risk to the lender if the borrower defaults. The scheme enables borrowers to secure a mortgage of up to 95% of the purchase price from a participating lender.
For more information about securing a contractor mortgage as part of the Help to Buy scheme, please click here or call us on 01489 555 080.
Article By: Jon Sheilds, Media Executive at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080