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.

Cameron announced that state-backed lenders, Royal Bank of Scotland and Lloyds Banking Group as well as NatWest and Halifax have agreed to offer subsidised mortgages to under the scheme from next week. The scheme was earlier planned for launch in January but the government brought forward its launch on the eve of the Conservative party conference in Manchester.

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.

Chancellor Osborne had announced the scheme in March budget and there were concerns that it would push up prices as there is less supply of houses.