Help to Buy Scheme
05th April 2013



The “Help to Buy” scheme  was welcomed by builders who believe it is set to stimulate the housing market.

The Government is proposing to provide guarantees to support £130bn of mortgage applications for buyers struggling to raise a deposit and will commit a further £3.5bn to shared equity loans to buy new-build homes.

For new build properties the government will put up a fifth of the cost, and for anyone who can afford a mortgage repayments but does not have sufficient deposit.

However, comparisons have been made to Fannie Mae and Freddie Mac crisis in the US, which had to be rescued in the run-up to the financial crisis after offering a similar scheme.

It has been asserted some bodies that  making credit available to borrowers that the banks would not otherwise lend to in the absence of a significant down-payment amounts to sub-prime lending.

The state-backed mortgage guarantee scheme, is set to be made available for old and new homes whereas previously it was only available on new build homes.


The new will no longer be exclusive to housebuilders and first-time buyers. It will soon be available to any buyer of a new build home, provided the property’s price is under £600,000.


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