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| Strong start for Help to Buy, say lenders | Strong start for Help to Buy, say lenders |
| (35 minutes later) | |
| Two major lenders have reported a strong uptake in the first month of the government's extended Help to Buy mortgage guarantee scheme. | Two major lenders have reported a strong uptake in the first month of the government's extended Help to Buy mortgage guarantee scheme. |
| Royal Bank of Scotland (RBS) and Halifax said they had received a total of 2,384 applications, potentially worth £365m in mortgages. | Royal Bank of Scotland (RBS) and Halifax said they had received a total of 2,384 applications, potentially worth £365m in mortgages. |
| The scheme is designed to encourage lenders to offer mortgages with deposits as low as 5%. | The scheme is designed to encourage lenders to offer mortgages with deposits as low as 5%. |
| But critics are concerned it could help to create a UK housing bubble. | But critics are concerned it could help to create a UK housing bubble. |
| RBS and its subsidiary NatWest, and Halifax - owned by Lloyds Banking Group - are among the few lenders to offer mortgages under the government's extended scheme. | RBS and its subsidiary NatWest, and Halifax - owned by Lloyds Banking Group - are among the few lenders to offer mortgages under the government's extended scheme. |
| The first phase of Help to Buy was launched in April, but only provided help to first-time buyers buying new-build homes. The extended scheme applies to all buyers and all types of homes. | The first phase of Help to Buy was launched in April, but only provided help to first-time buyers buying new-build homes. The extended scheme applies to all buyers and all types of homes. |
| RBS said it had so-far approved 169 of its 1,075 applications, and five customers had already completed their purchases. | RBS said it had so-far approved 169 of its 1,075 applications, and five customers had already completed their purchases. |
| It said the majority of applications had come from young couples with a joint salary of less than £50,000. The average price of the property being bought was £167,565. | It said the majority of applications had come from young couples with a joint salary of less than £50,000. The average price of the property being bought was £167,565. |
| Halifax said more than 80% of the applications it had received under the scheme were from first-time buyers. | |
| It said the majority of applications had come from outside London and the south-east of England, where property prices are rising fastest. | It said the majority of applications had come from outside London and the south-east of England, where property prices are rising fastest. |
| It also said that five purchases had so far been completed. | It also said that five purchases had so far been completed. |
| Bubble worries | Bubble worries |
| The government welcomed the figures, saying the scheme was supporting "responsible lending", helping borrowers who could afford mortgage repayments, but not a large deposit. | The government welcomed the figures, saying the scheme was supporting "responsible lending", helping borrowers who could afford mortgage repayments, but not a large deposit. |
| "Four weeks in and its clear that Help to Buy is already delivering," said Prime Minister David Cameron. | "Four weeks in and its clear that Help to Buy is already delivering," said Prime Minister David Cameron. |
| "Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder." | "Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder." |
| But critics have expressed concern that the scheme could create a bubble in the housing market, making home affordability an even bigger problem. | But critics have expressed concern that the scheme could create a bubble in the housing market, making home affordability an even bigger problem. |
| Chris Leslie, the shadow chief secretary to the Treasury, said: "If the government was serious about helping first-time buyers they would also be bringing forward investment to build more affordable homes. | |
| "Rising demand for housing must be matched with rising supply, but under this government house building is at its lowest level since the 1920s," he said. | |
| Labour says that the Bank of England should review the scheme immediately, rather than waiting for a year. | |
| The latest figures from the Office for National Statistics suggest average house prices in the UK have now recovered from the slump seen during the recession. | The latest figures from the Office for National Statistics suggest average house prices in the UK have now recovered from the slump seen during the recession. |
| Figures from Halifax suggest house prices have yet to hit their 2007 peak, but have risen steadily for the last nine consecutive months. | Figures from Halifax suggest house prices have yet to hit their 2007 peak, but have risen steadily for the last nine consecutive months. |
| The Nationwide Building Society says prices are currently 5.8% higher than a year ago. | |
| But estate agents argue that much of those price rises are seen in London and the south-east of England, while prices in other parts of the country are rising more slowly, or in some cases actually falling. | But estate agents argue that much of those price rises are seen in London and the south-east of England, while prices in other parts of the country are rising more slowly, or in some cases actually falling. |