Hammond Confirms Closure of Osborne Help-to-Buy Housing Programby
Scheme closes to new borrowers at the end of 2016 as planned
More than 30 lenders now offer high loan-to-value mortgages
U.K. Chancellor of the Exchequer Philip Hammond said he’ll press ahead with the closure of a government program that was introduced to assist home buyers, saying it’s no longer needed.
The Help-to-Buy Scheme, introduced by his predecessor George Osborne, will close to new loans at the end of 2016 as planned, Hammond said in a letter to Bank of England Governor Mark Carney released on Thursday.
The program has allowed more than 86,000 households purchase a home with a down payment of as little as 5 percent since it started in 2013. It saw the government offer banks the option to purchase a guarantee on mortgage lending in exchange for offering higher loan-to-value ratios.
Last year, it accounted for only 3 percent of total mortgage lending and more than 30 lenders now offer loan-to-value ratios of between 90-95 percent outside the scheme.
“This reflects the fact that the scheme was introduced with a specific purpose that has now been successfully achieved,” Hammond said, responding to a Sept. 22 letter from Carney about the program. “The end of this particular scheme does not diminish in any way the government’s commitment to supporting those looking to get on the housing ladder.”
The government’s Help to Buy equity loan and individual savings accounts initiatives remain open to new borrowers.