Panel raises doubts over ‘Help to Buy’ initiative

Help to BuyA high level panel in the UK has said raised concerns over the Help to Buy initiative, which is aimed at helping people purchase houses in the UK.

The Treasury Select Committee raised a serious warning over George Osborne's £12bn scheme that is to help first-time buyers buy houses with lower deposits. Following the roll out of government's Help-to-Buy scheme, the average deposit required for buying a new home has fallen around 75 per cent to 11,108 pounds allowing more people to acquire homes in the country.

The government's plans to enable buyers to acquire homes with a 5 per cent minimum down payment would mean that the deposits would fall to less than 10,000 pounds in six of 10 regions in U. K. David Cameron, the Prime Minister of the United Kingdom has announced the launch of controversial Help to Buy scheme around three months earlier than planned.

The Help to Buy scheme, which is backed by Chancellor George Osborne, will allow banks to offer mortgages up to 95 per cent with very little risk. Under the scheme, taxpayer will be able to get insurance for up to 15 per cent of a mortgage on houses worth up to £600,000. The scheme will be available for £12 billion of guarantees on up to £130 billion of mortgages and will be open for three years.