By Ian Dipple Thursday 10 October 2013 Updated: 11/10 09:50
A REDDITCH bank has extended its opening hours to help cope with the expected surge in demand for the Government's new Help to Buy Scheme.
Natwest on Church Green East has announced the move on Tuesday (October 8) as the bank begins to offer 95 per cent mortgages to first and next time buyers on new or existing homes worth up to £600,000.
Two and five year deals of 4.99 per cent or 5.49 per cent are being offered with no fee and together with RBS, Natwest expects to issue 25,500 mortgages through the scheme over the next three years.
Halifax, based on Evesham Walk, has also signed up to the scheme and from today (Friday) will be offering two year fixed deals at 5.19 per cent with a fee of £995.
The scheme was introduced by the Government because of difficulties faced by residents who could not afford large deposits of up to 20 per cent of a property's value.
Help to Buy means people will only need a five per cent deposit, the Government will then guarantee up to 15 per cent of the property's value in return for a fee from a lender.
The scheme was set to be launched in the new year but has been brought forward by three months.
Lloyd Cochrane, head of mortgages at RBS and Natwest, said strict lending criteria would still apply.
"It’s clear for many of our customers this scheme will make the difference and enable them to buy that next property. I bought my first home with a 95 per cent mortgage, so I understand how hard it can be to save for a large deposit. This scheme will make that challenge to pull together a deposit a little bit easier."
Critics say the scheme will lead to a boom in house prices similar to that seen prior to the global economic crash and pressure should be applied to get banks lending without risking taxpayers money.
But it was a claim rejected by Redditch MP Karen Lumley who said the scheme could boost jobs in the construction industry.
"It's the aspiration of a lot of people to own their own homes and if a bank in Redditch is staying open later then they think that's what people want to," she said.
"This will help more people for the first time buy their own home. Statistics show these days you have to be over 30 to even stand a chance.
"When I talk to banks they say they are already lending and of course they should be but if there is any extra incentive we can give then we should do as well and that's what we've done."
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