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MP questions Help to Buy scheme
5:00am Tuesday 1st October 2013 in News
A HAMPSHIRE Conservative MP has questioned the Government's flagship 'Help to Buy' scheme - warning of the danger of a fresh house-price bubble.
And she said she needed to see “further details of the policy” - which David Cameron has speeded up, allowing it get underway next week, instead of next year.
Ms Nokes said: “What is imperative is that we do not create an artificial bubble in the market. There must be very strict affordability criteria.”
Under 'Help to Buy', the Treasury will underwrite £130bn of home loans, allowing people trying to move up the housing ladder to obtain a mortgage with a deposit of just five per cent.
It would apply to properties worth up to £600,000, with 20 per cent of the cost funded by a “shared equity” loan, repayable when the home is sold.
In Southampton, where the typical semi-detached home costs around £200,000 a buyer would be forced to find just £10,000 - instead of up to £40,000, as currently demanded.
Help to Buy has already been introduced for newbuild properties. The intention, with the property market becalmed, was to extend it to existing homes.
But - with house prices now on the rise across the South East - a growing number of critics have warned of the danger of a fresh house price bubble and subsequent crash.
The latest figures show house prices in Southampton rose by 3.5 per cent in just three months - and are up five per cent, year-on-year.
On Sunday, Mr Cameron dismissed the warnings, saying: “I am not going to stand back while people's aspirations to get on the housing ladder, to own their own flat, to own their own home, are being trashed.
“If we don't do this, it will only be people with rich parents who can help them with the deposit who can get on the housing ladder. That is not fair.”
Ms Nokes added: “I think it is important to give people the opportunity to invest in their futures and I look forward to reading further details of the policy.”
He said: “Help to Buy is very welcome direct assistance from Government in response to a problem that has been raised with me so many times.
“It's a practical guarantee to help those who can afford the mortgage payments, but can't get the deposit together.”
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