HSBC Holdings Share News (HSBA)

UK banks were on Tuesday beginning to reveal details on new mortgages as part of the government's extended Help to Buy scheme. The extension means that buyers may now be able to afford a mortgage with a significantly smaller deposit, although there have been widespread concerns that it will result in a housing price bubble. The first banks to take advantage of the landmark £12bn scheme are Halifax, RBS and NatWest. The latter two are offering customers two-year, 4.99% fixed-rate mortgages on a 5% deposit, with no fee. Both HSBC and Virgin Money also plan to offer new mortgage deals within the next six months.Buyers will by able to take out mortgages on up to 95% of a property's value on homes worth up to £600,000, and depending on the size of the deposit the government will guarantee up to 15% of the property's value, in return for a fee from the lender. The Prime Minister said of the scheme: "Too many hardworking people are finding it impossible to buy their own home - people who can afford the monthly mortgage payments but haven't got rich parents and can't pay the deposit up front."There is a need for government to act. Buying your first home is about far more than four walls to sleep at night. It's somewhere to put down roots and raise a family. It's an investment for the future. Above all, it's a sign that everything you've put in has been worth it."Our Help to Buy Equity Loans, have already helped over 15000 people buy a new home. But we've got to go further and finish the job we've started [...]"Moves such as Help to Buy will also encourage housebuilding. If potential buyers can't buy, builders won't build - so this is an important part of unlocking the market."However, the Treasury Select Committee was feeling far less confident in the scheme, and on Monday evening revealed it had serious concerns, saying the move could "raise house prices rather than stimulate new supply". The MP group continued: "Given the chequered history of government interventions in residential property, great care will need to be taken in both the construction and running of this scheme. Mistakes could distort the housing market or carry threats to financial stability. "The government has yet to allay the committee's concerns about the Help to Buy mortgage guarantee scheme. It may not have the effects intended."However, on Tuesday Treasury Secretary Danny Alexander responded by saying those who held the belief a property bubble would be created ought to "get out more". NR