Property prices in the UK are expected to continue to boom in the coming months, after the government brought forward the second phase of the Help-To-Buy (HTB) scheme.
The scheme which will allow UK residents to take out mortgages of up to 95 per cent of the value of a house was scheduled to be introduced at the start of next year, but David Cameron announced this weekend that the mortgages will be available from this week in order to help first time buyers enter the market.
“As prime minister I am not going to stand by while people’s aspirations to get on the housing ladder are being trashed,” he said yesterday. “If we don’t do this it will only be people with rich parents to help them who can get on the housing ladder – that is not fair, it is not right.”
Banks, building societies and brokers are now fearing and stampede of inquiries over the coming week as people move to take advantage of the new terms.
However, some experts fear that the measure could send the UK’s rapidly rising property price spiralling out of control.
“Guaranteeing mortgages can only cause more money to be lent into the housing market, meaning house prices pushed even further out of reach of first-time buyers,” said Duncan Scott, director of PricedOut which campaigns for more affordable house prices for first time buyers. “The sheer cost of housing in the UK is having disastrous consequences for the economy and for society, but the government is simply perpetuating this unsustainable situation.”
Meanwhile, Adam Marshall of the British Chambers of Commerce, said: “With all the concern expressed about Help to Buy, rushing into it seems less than responsible on part of government.”