Nick Clegg, the deputy prime minister, suggested at the weekend that the government’s Help to Buy scheme could be pared back if the Bank of England believes the housing market is overheating.
Clegg made his comments after Governor Mark Carney warned about the dangers that a booming housing market poses to long-term financial stability.
The problem with suddenly scaling back Help to Buy is that there will be people who were planning on using it later in the year who may panic and accelerate their plans. Far from dampening demand, this could lead to a surge in interest in the scheme and potentially people jumping in before they are ready.
Likewise, fears that the Bank of England is going to insist lenders use even stricter underwriting criteria may also instill a sense of panic about getting a mortgage now, before any changes are made.
Borrowers should not panic and certainly shouldn’t buy before they are ready. Contact us for independent mortgage advice and ensure you can afford any mortgage you can take on, and that it’s the right time to do so.