Calls for Help to Buy to be reconsidered - Mortgages - News - Moneyfacts


Calls for Help to Buy to be reconsidered

Calls for Help to Buy to be reconsidered

Category: Mortgages

Updated: 30/12/2013
First Published: 30/12/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Business Secretary Vince Cable has expressed reservations over the Help to Buy scheme, believing it should be reconsidered as it was "conceived under very different circumstances".

His views were aired when he spoke to the BBC last week, and it echoed those of other Help to Buy critics that have argued the scheme has pushed house prices up too quickly and, as such, has only further restricted the market to those first-time buyers it was intended to help.

There are additional concerns regarding how the scheme will be brought to an end and that the mortgage market is already overheating, which has led the Prudential Regulation Authority (PRA), the UK's financial services regulator, to say it will take action if necessary.

However, there are hopes that the restriction of the Funding for Lending Scheme to business lending only will provide the solution. As cheap funds are no longer available for residential mortgage lending it's hoped the changes will serve to dampen down the mortgage market and ideally bring house prices to a natural plateau.

There may not be too much cause for concern anyway, as according to the Halifax the average house price (currently £174,910) is 12% below the peak seen in August 2007 – meaning the market is still nowhere near housing boom territory – which should allay some of the fears currently being expressed.

What Next?

Whether Help to Buy is reconsidered or not, it's still a great time to get on the housing ladder. Use our handy mortgage calculator and comparison tool to find the best deal for your needs.

For more information the Help to Buy schemes check out our guides:

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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