Prime minister David Cameron has ruled out foreign buyers or people looking to buy second homes from using the Help to Buy scheme.
Speaking in the House of Commons at prime minister’s questions today, Cameron said the Help to Buy scheme will have rules to stop it being used for second homes.
The Government had come under fire from Labour for allowing “mortgages for millionaires” when the scheme was first announced in March. The Treasury select committe also raised concerns about who would have access to Help to Buy.
Help to Buy consists of a shared equity loan scheme for new-build homes, which launched in April, and a mortgage indemnity guarantee for all homes is set to launch in January 2014.
Under the mortgage indemnity guarantee, the Government will offer a guarantee of up to 15 per cent of the purchase price, with the borrower putting down a deposit of between 5 and 15 per cent. It will be available to home movers and buyers on homes worth up to £600,000 for three years.
Cameron said: “This scheme is for people’s only home. It will have a mechanism in place to make sure that is the case. The second thing is that in order to take part in the scheme you have to have a credit record in this country so it won’t help foreign buyers.”
Chancellor George Osborne has previously defended allowing people to own more than one home because people often own two houses temporarily when moving.