Help to Buy could fuel house price bubble


Help to Buy could push first-time buyer house prices up 20% to more than £150,000 by the end of 2015, a financial consultancy has warned.

Fathom Consulting suggested under normal conditions, the government scheme would lead house prices to inflate by 10%. However, the promotion of 95% loan-to-value mortgages indicated a looser market, meaning the figure could be more like 20%. Using recent house price index figures, this means the average first-time buyer house price could reach more than £150,000 and the average house price come close to £300,000 in two years. In its report, Fathom described Help to Buy as a reckless scheme which had the potential to increase house prices and hike up household debt to record levels. ...

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