The second phase of the Help to Buy scheme, which was first announced in March as part of the 2013 Budget, was due to begin in January 2014. Under the mortgage guarantee scheme the Government will offer guarantees to lenders offering mortgages to buyers who have a deposit between 5% and 20%. It will apply to existing home owners as well as first time buyers.
The first part of the scheme, the shared equity loan programme, was launched in April. It makes loans worth up to 20% of the value of a home available to purchasers of new build homes with a value of up to £600,000.
The Treasury said official statistics had shown that mortgage lending is around half the level it was before the economic crisis, although mortgage rates are at their lowest for five years.
"As Prime Minister I am not going to stand by while people's aspirations to get on the housing ladder are being trashed," said Prime Minister David Cameron on BBC's Andrew Marr show yesterday. "If we don't do this it will only be people with rich parents to help them who can get on the housing ladder - that is not fair, it is not right," he said.
The Scottish Government has announced that it is also introducing a Help to Buy shared equity scheme. Under the scheme, which is set to run for three years, Ministers will allocate £220 million to help eligible buyers obtain an equity loan of up to 20% of the purchase price of a new-build home with a value of up to £400,000.
"There is no doubt that getting onto or moving up the property ladder has become tougher in recent years," said Deputy First Minister Nicola Sturgeon in a statement. "House buyers are being hampered by the lack of affordable mortgages, with high deposits often a major barrier."
"The Help to Buy (Scotland) scheme will not only help people to buy their first home, it will also help 'second-steppers' and others move to a new property. The scheme will also help support the housing industry alongside our commitment to investment in affordable housing across Scotland," she said.
The Scottish scheme is open from today and is available to first-time buyers and existing home owners.
