I am told that the Treasury has told the banks it will charge them a supposedly "commercial" rate of about 0.9% for insuring up to three-quarters of the first 20% of losses on mortgages for homebuyers who cannot afford to provide a big deposit.
From this week, banks in England are expected to start outlining new mortgages under the government's Help To Buy scheme.
The initiative means that banks are able to offer mortgages to people who only have a 5% deposit.
The Government has announced the second phase of its controversial Help to Buy scheme three months earlier than scheduled.
The mortgage guarantee scheme, which is designed to help first-time buyers and existing property owners move up the housing ladder, will allow borrowers with a 5pc deposit to buy property worth up to £600,000.
Treasury Minister Sajid Javid said the Help to Buy scheme, which aims to get people on the housing ladder was "for everyone" and not just young people.
The second phase of the Help to Buy scheme will start from next week instead of January, the Conservatives announce, as their party conference opens.
Chancellor George Osborne has asked the Bank of England to take a bigger role in ensuring his Help to Buy housing scheme does not fuel a property boom.
The Bank's Financial Policy Committee (FPC) will make annual reviews of the scheme, starting next September.
The chancellor believes he got the thumbs up (in private) for his ambitious mortgage-guarantee scheme, Help to Buy, from the newish Canadian governor of the Bank of England, Mark Carney.
Two of Britain’s biggest house builders have announced that their sales are being boosted by the Help to Buy scheme – which allows buyers with 5% deposits access to shared equity mortgages on new homes worth up to £600,000.
Nearly 40% of tenants who are trying to escape being part of today’s ‘Generation Rent’ could become home-buyers when the 95% Help to Buy scheme is implemented in January.
Demand for property has reached a three-year high as government schemes to boost the market began to take effect, surveyors reported today.
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