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£12bn Help to Buy scheme launches with 95% deals starting at 4.99%

The Treasury has launched its £12bn Help to Buy mortgage guarantee initiative with lenders offering two year 95 per cent mortgages from 4.99 per cent. 

Under the scheme, which is being introduced by the Government to increase the availability of cheaper mortgage deals, the Treasury will guarantee up to 15 per cent of the property’s value in return for a fee from the lender.

NatWest, RBS, Halifax and Bank of Scotland will start offering new Help to Buy mortgages this week, while Virgin Money, HSBC and Aldermore have committed to joining the scheme next year.

Halifax is offering a 95 per cent two-year fixed rate through the scheme at 5.19 per cent while RBS is offering a two year rate at 4.99 per cent and a five year rate at 5.49 per cent. 

NatWest and RBS customers will be able to start the process of applying for a Help to Buy mortgage today, although the bank will not start lending the mortgages through intermediaries until later this year.  

Prime Minister David Cameron says: “Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out. This goes right to the heart of my vision for Britain – a country where everyone who works hard can get on in life.

“Moves such as Help to Buy will also encourage housebuilding. If potential buyers can’t buy, builders won’t build – so this is an important part of unlocking the market.”

However, Treasury select committee chairman Andrew Tyrie warns the new scheme could threaten financial stability.

He says: “The Government has yet to allay the committee’s concerns about the Help to Buy mortgage guarantee scheme. It may not have the effects intended over its proposed three year life.

“The decision to bring the scheme forward by three months does not alter our concerns. 

“Given the chequered history of Government interventions in residential property, great care will need to be taken in both the construction and running of this scheme.

“Mistakes could distort the housing market or carry threats to financial stability.”



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  1. This looks like a classic piece of Government spin and con.
    1. The STARTING interest rate is almost 2.5% higher than the current best available rate. That’s just about double. No wonder banks want to get on board. Euro Repo is around 1.25% – so they will be making about 300% gross on their money. (I’ll take a piece of that!)
    2. The creditworthiness of applicants will have to be even more stringent than normal and most applicants will have to be earning well over the national average wage. After all this can’t clash with the MMR and indeed it doesn’t look as if it will as the hurdles are even higher.

    So who is going to end up being the beneficiary of such a scheme? Not the ones the publicity tells us – I’ll warrant.

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