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UK mortgage guarantee plan to start in days!

A mortgage guarantee program to help people buy their own homes will be launched three months earlier than planned, British Prime Minister David Cameron said on Saturday, stamping his authority on an initiative that has raised fears it could stoke a housing bubble.

The "Help to Buy" plan, aimed at people who have been frozen out of the property market by the soaring size of deposits required to get a mortgage, had been due to start in January, but will now come into force next week.

"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 - £50,000 deposit," Cameron said in a statement issued by his Conservative Party. "Now, if you haven't got rich parents, you can't get that sort of money. 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."

The initiative involves the government providing 12 billion pounds in guarantees to encourage lenders to provide mortgages of up to 95 percent of the value of properties being bought.

Cameron's announcement comes on the eve of the Conservative Party's annual conference, occasions often used by British political parties to make big eye-catching announcements.

It also comes two days after Finance Minister George Osborne, in a surprise move, asked the Bank of England to keep a closer eye on whether Help to Buy might contribute to a house-price bubble.

Previously, the central bank was only due to vet the scheme after three years. Now it will do an annual check on whether the £600,000 limit on properties that can be bought under the plan is too high, and if fees charged to banks are too low.

Data showed on Friday that British house prices shot up at their fastest pace in more than three years in September.

We are expecting the demand for these mortgages to be high, so if you or someone you know thinks they may qualify for this scheme, please contact us for further details.


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