Chancellor moves to allay Help to Buy concerns

The Chancellor George Osborne has moved to clarify the details of the Help to Buy mortgage scheme in an attempt to allay concerns that the scheme could further damage the fragile UK housing market.

The second stage of the Help to Buy scheme, aimed at enabling more people to buy properties, will be closed to second home buyers.

At a meeting at Number 11 the Chancellor discussed with lenders and builders details of how the scheme will work, as well as broader efforts to get more first time buyers on the property ladder.

Osborne said: “I’m determined to back people who want to do their best for their families. Help to Buy is about getting behind those who aspire to own a home.

“The mortgage guarantee will support an increase in high loan-to-value mortgages for people who can’t afford large deposits, and it will also boost house-building.

“As of today lenders have the detail they need to go away and get ready for next January’s launch.”

Major UK homebuilders have put their support behind the scheme and its ability to help boost housing supply.

Stewart Baseley, executive chairman of the Home Builders Federation said the “outlook for new homes delivery is a positive one”.

The house-builders confirmed that taken together with the equity Loan scheme, government action has already helped boost home construction.

The Council of Mortgage Lenders has also welcomed today’s meeting with the Chancellor.

Paul Smee, director general of the CML, said: "The mortgage market is open for business, and it is clear that government support has helped to create more favourable market conditions for home-buyers.

“Lenders, whether they choose to participate in the guarantee scheme or stay outside, will continue to do their utmost to meet households' needs for mortgages, but always in a way that is responsible."

Peter Lawrence at Lawrence Rand added: “The Help to Buy programme is progressing, which is encouraging for those who are looking to buy a home, but are struggling to raise the necessary deposit. The indemnity scheme will really increase the number of options for first time buyers or home movers who need a mortgage at a higher loan to value level.”