Cameron brings forward help-to-buy scheme

British Prime Minister David Cameron at the G20 summit on September 6, 2013 in Saint Petersburg (AFP/File)

London (AFP) – Prime Minister David Cameron said Sunday he was bringing forward the government's "Help to Buy" scheme from January to next week to assist first-time home-buyers in getting on the property ladder.

The state-backed mortgage scheme was due to start in the New Year but Cameron said people would be able to apply for the new guarantee from next week.

Despite widespread concern that the second stage of the scheme could spark a housing bubble, the Tory leader is forging ahead, insisting the "earlier the better" to introduce assistance for buyers.

The mortgage guarantees will allow buyers to acquire a newly-built home or an existing property worth up to ??600,000 with a deposit of only five percent.

It will see the state offer guarantees totalling up to ??12 billion on ??130 billion of high loan-to-value mortgage lending.

Cameron thinks that will help solve the situation in which people on average wages can struggle to buy even modest properties because they cannot front up the deposits needed, or find a mortgage.

Cameron's Conservative Party kicks off Sunday its four-day annual conference at the Manchester Central venue, with the prime minister due to speak on Wednesday.

"Young people who've got a decent job and have got decent earnings -- they cannot buy a house or a flat, because they have to have a ??30,000, ??40,000 or ??50,000 deposit. Now, if you haven't got rich parents, you can't get that sort of money," Cameron said.

"So we're going to launch the Help To Buy Scheme -- it's not coming in next year, it's coming in next week, because I'm passionate about helping people who want to own their own flat or home.

"You take a nurse married to a teacher. They're both earning ??25,000 -- that's pretty close to average full time earnings. If they want to buy a ??200,000 house, they're going to have to find a ??40,000 deposit.

"Now, they can't do that, unless they've got rich parents. That's not right. That's not an aspiration nation."

Several high-profile figures have warned that it could lead to more problems than it solves.

Liberal Democrat Business Secretary Vince Cable warned the scheme "could inflate the market" and said he feared there was a "danger of getting into another housing bubble".

Former Bank of England governor Mervyn King warned that the plan is "too close for comfort" to a general scheme to guarantee mortgages.

Labour's shadow chancellor Ed Balls said building more homes was the way to make house prices more attainable.

"If David Cameron is serious about helping first-time buyers he should be bringing forward investment to build more affordable homes. Rising demand for housing must be matched with rising supply, but under this government housebuilding is at its lowest level since the 1920s," he said.

Meanwhile a YouGov poll for The Sunday Times puts Labour on 42 percent, the Conservatives on 31 percent, UKIP on 13 percent and the Liberal Democrats on nine percent.