Government Backed Mortgage Indemnity Scheme

David Cameron announced the first ever government-backed mortgage indemnity scheme. Under the new programme, developed jointly by the Home Builders Federation (HBF) and Council of Mortgage Lenders, 95% percent mortgages will be made available to existing homeowners as well as first-time buyers (FTBs) on new-build properties (houses and flats) worth up to £500,00

Mr Cameron said "Strong families and stable communities are built from good homes. That's why I want us to build more homes and I want more people to have the chance to own their own home."It's no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital."

However, not everyone is welcoming the news unreservedly. Dominik Lipnicki, of Your Mortgage Decisions, said: "You can already obtain 95% mortgages with comparable interest rates of 5% plus.

"It's more of a gimmick. It's a great headline and it will help some but mainly the construction industry.All this will do is encourage people to buy new properties but old property won't be sold and the chain will stop."

UK Mortgage and Home Loan News