As the second stage of the Government’s Help to Buy scheme begins, some major banks revealed the mortgage deals that will operate in conjunction with the initiative.

The scheme has been created to give more people access to mortgages, particularly those who can afford only small deposits.
Majority state-owned banks RBS, Halifax and NatWest are to begin accepting applications this week, while HSBC and Virgin Money will start offering mortgages under Help to Buy in the coming months.

There has been a great deal of media coverage surrounding a possible housing bubble, but Treasury Secretary Danny Alexander explained to the BBC that there was no property price boom.

“People who think that there’s a housing bubble should get out more. They should get out of Kensington and Chelsea, and go to Manchester or Birmingham, and major towns across the country,” he said.

Mr Alexander said Help to Buy would assist those who did not have “piles of cash” for a deposit on a property.
RBS and NatWest – which are part of the same banking group – have created a two-year fixed rate mortgage for those with a 5 per cent deposit, beginning at 4.99 per cent with no fee.

The initial phase of Help to Buy gave English buyers of new-build properties a 20 per cent equity loan in addition to their 5 per cent deposit. Comparable schemes began in Scotland and Wales.

Phase two involves the Government guaranteeing 15 per cent of a given mortgage, with buyers only required to put down a small deposit. The guarantee is available to lenders for a small fee – expected to be 9 per cent of the sale price.

Phase two is open to buyers across the UK for properties worth up to £600,000.

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