By William Schomberg and Estelle Shirbon
LONDON, Sept 28 Britain's prime minister
launched a critical week for his party's run-up to the 2015
elections by unexpectedly bringing forward the launch of a
mortgage guarantee programme that critics say risks stoking a
Conservative leader David Cameron said on Saturday that the
plan would be up and running next week, three months earlier
than previously planned.
The "Help to Buy" plan is aimed at people who have been
frozen out of the property market by the soaring size of
deposits required to get a mortgage.
"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-pound ($48,400), 40,000-pound or 50,000-pound
deposit," Cameron said in a statement.
"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.
It had been due to launch in January and key details such as
the fees banks will pay to participate have yet to be announced.
Cameron's announcement comes on the eve of the start of the
Conservative Party's annual conference in Manchester. Such
occasions are used by British political parties to make
eye-catching announcements and this year offer the chance for
them to set out their programmes before a general election due
Earlier this month, opposition leader Ed Miliband said a
government run by his centre-left Labour Party would freeze
energy bills for 20 months, a move aimed at winning over British
voters, many of whom have seen their living standards fall
during the slow economic recovery from the financial crisis.
Signs that Britain's economy is on the mend had boosted the
Conservatives' standing among voters, but Labour's support has
risen in opinion polls since the announcement by Miliband. A
YouGov poll for the Sunday Times puts Labour at 42 percent, with
the Conservatives at 31 percent. Cameron's coalition partners,
the Liberal Democrats, languish at 9 percent.
CONCERNS IN THE COALITION
Seeking to give a boost to homeownership carries risks for
the government. Since the mortgage guarantee component of Help
to Buy was announced in March, house prices have picked up,
raising questions about whether it is still needed.
Britain's business minister, Vince Cable, a Liberal
Democrat, has expressed his concerns about the programme.
House prices rose at their fastest pace in more than three
years in September, one set of housing data showed on Friday. In
London, prices have jumped by nearly 10 percent over the past 12
months, although other regions have seen barely any increase
In a nod to the concerns about a new boom, Britain's finance
minister, George Osborne, last week asked the Bank of England to
keep a closer eye on the impact of Help to Buy.
Both Osborne and Bank of England Governor Mark Carney have
pointed to activity in the housing market that is well below its
pre-crisis peak as a sign that there is no new housing boom.
Ed Balls, Labour's would-be finance minister, responded to
Cameron's announcement on Saturday by saying the government
should bring forward investment to build more affordable homes,
denouncing what he said was the lowest rate of house-building
since the 1920s.
"Unless David Cameron acts now to build more affordable
homes, as Labour has urged, then soaring prices risk making it
even harder for first time buyers to get on the housing ladder,
Balls said in a statement.