The government’s controversial Help to Buy Scheme is set to expand rapidly this year. The number of mortgage applications made under the scheme in December was double the figure for November, and more lenders will be available in the coming months.
The growth was hailed by David Cameron as a much needed boost for hard-pressed home-buyers.
The treasury-backed mortgage scheme attracted 4,000 applications last month, up from 2,000 in November, the first month the scheme was available.
Lloyd’s, RBS and HSBC already offer mortgages through the scheme, and they are to be joined by Santander and Barclays this year as the scheme expands.
Cameron said that the 6,000 applicants would require £1bn in state support. So far only 750 applications have been processed.
He said: “The new year is often a time when people look to make those big life-changing decisions like moving home or taking that first step on the housing ladder.
“But too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.
“That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home.”
Speaking just a day after official housing figures revealed that house prices in London had jumped by over 10%, Cameron said that most applicants to the scheme were for properties outside the capital, and that 80% were first time buyers.
But business secretary Vince Cable warned that the scheme could fuel a housing bubble. In a BBC interview just before Christmas he said: “We certainly need to look at that [scheme] again. It was conceived in very different circumstances.”