Lloyds will help first time buyers
Lloyd's of London REUTERS

The UK government is implementing the second phase of its Help to Buy program that will enable buyers of all properties, not only new-build, the ability to borrow with only a 5 per cent deposit. The government will guarantee a proportion of the loan as an insurance policy for banks, provided the property is under 600,000 pounds, or $900,000.

The $18 billion program will be launched in January 2014 and has the blessing of the UK’s biggest mortgage lender, LloydsTSB. “From all the information we’ve got at the moment, we are definitely in the camp where we will join the scheme,” said Stephen Noakes, director of mortgages at Lloyds Banking Group. “We’ll continue to work closely with the Treasury as they finalise the details, but fully expect to be ready to launch in January.”

The opposition Labour Party has expressed concern over the policy. Jack Dromey, the shadow housing minister, said “There is now widespread criticism that this scheme will do little to bring the cost of housing within the reach of low and middle income earners.”

Dromey added: “Unless the government finally acts to build more affordable homes, then home ownership for millions of first-time buyers will remain but a dream.”