Help to Buy Scheme second phase launched

To prevent a bubble in the housing sector, borrowers will be subjected to income checks and credit history.

10:15 25 July 2013

In a meeting with mortgage lenders and house builders, George Osborne has launched the second phase of Help to Buy Scheme where he discussed the terms of the programme designed to help more people to buy properties.

Osborne hopes that the £12billion scheme will not cause a bubble. Measures that will be undertaken include subjecting borrowers to income and credit history check. Also, borrowers who are looking at buying a second home will be barred from the scheme.

A spokesman said that under this scheme, would-be borrowers will not be granted access to the guaranteed mortgages if their credit history did not meet the Financial Conduct Authority’s impaired credit standards.

He added, as reported by The Guardian: "Borrowers must be able to afford the mortgages, with income verification and stress testing as set out in the FCA's mortgage market review."

Meanwhile, the Treasury said that the scheme is designed to protect the taxpayers. “It will be set to encourage as many lenders as possible to participate in the scheme, while protecting the taxpayer.”