August 13, 2013 / 7:54 AM / in 4 years

Britain's home buying aid scheme boosts new homes market

LONDON (Reuters) - The British government said on Tuesday that 10,000 new homes had been reserved by beneficiaries of its ‘Help to Buy’ stimulus package, designed to boost the property market and encourage developers to build more houses.

An estate agent's sign is posted outside a terraced house in north London August 2, 2013. REUTERS/Suzanne Plunkett

The data covers the four months since the scheme was launched in April as part of plans to generate economic growth and tackle a housing shortage.

“This government’s package of measures to boost the housing market is working, with house building and housing supply on the up,” said Eric Pickles, secretary of state for Communities and Local Government.

The scheme, targeted at new-build properties, provides a government equity loan that covers up to 20 percent of the property price and is designed to help buyers with a small deposit get access to mortgage financing.

Critics including Britain’s business secretary Vince Cable say it risks creating a bubble in property prices. A second phase of the Help to Buy scheme will begin next year, providing 12 billion pounds of guarantees.

Reporting by William James; Editing by John Stonestreet

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