07 May 2014
OECD Advises Government on Help to Buy Scheme
The OECD warns the Government on rising house prices and suggests implementing some control measures. House prices are soaring compared to household incomes and rent.
There are two elements of the Help to Buy Scheme:
The first allows buyers to put down a deposit of only 5% on newly built houses. This was launched in April 2013 in England, September 2013 in Scotland, and January 2014 in Wales. This allows house buyers to take out a 75% mortgage, and the remaining 20% is provided by the Government. The system has been extended in England until 2020.
The second element offers a government guarantee against losses for lenders, but only when a small deposits are applied. This applies to second hand homes and ends in December 2016.
The two combined systems have caused the average house price in the UK to rise sharply. According to Nationwide this now stands at £183,577.
Stewart Property Buyers Team