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Govt confirms Help to Buy will close at end of year

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The Government has confirmed it will end the Help to Buy 2 scheme at the end of the year, according to the Telegraph.

The H2B2 scheme was launched in January 2014 as the Government’s remedy for a sluggish high-loan-to-value market.

Lenders could buy a guarantee from the Government to cover any losses on 80-90 per cent LTV loans, should the borrower default.

The closure of the scheme was confirmed in a letter from Chancellor Philip Hammond to Bank of England governor Mark Carney.

Hammond said that Help to Buy had achieved its aims as more than 30 lenders were now lending outside the scheme.

He said: “The mortgage market has become less reliant on the scheme as confidence has returned.

“There are now 30 lenders offering 90-95 per cent loans outside the scheme. This reflects the fact that the scheme was introduced with a specific purpose that has now been successfully achieved and, as such, I can confirm that it will close to new loans at he end of 2016 as planned. I will inform participating lenders.”

The Help to Buy Isa and Help to Buy equity loan schemes will continue.

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