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23.07.13

‘Rigorous checks’ announced for Help to Buy

Chancellor George Osborne has launched the second phase of Help to Buy, which ministers claim could guarantee up to 190,000 mortgages a year, over three years.

The £12bn scheme will underwrite home purchases worth up to £600,000, but will be subject to new income checks and ‘stress testing’ to ensure buyers can afford the mortgage.

From January 2014 the second phase will come into effect, offering buyers a deposit of as low as 5%. There will be a prohibition on using the loan guarantee to acquire a second home.

Borrowers’ credit history must also meet the Financial Conduct Authority's “impaired credit” standards to use Help to Buy.

A spokesperson said: “Borrowers must be able to afford the mortgages, with income verification and stress testing as set out in the FCA's mortgage market review.”

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