Help to Buy boosts mortgage applications at RBS

14th Oct 2013 09:47

Royal Bank of Scotland has experienced high demand for mortgages after the government launched the second phase of its Help to Buy scheme last week.The lender booked up 5,000 mortgage appointments with customers within just three hours of the scheme going live and received 10,000 calls in the first four working days."From the moment we launched our Help to Buy mortgage products, the response we've had from customers has been fantastic," Lloyd Cochrane, head of mortgages at RBS and its NatWest subsidiary, told The Telegraph."We knew there was pent up demand, from speaking to customers we knew there was a frustration and a desire for these products."The second phase of Help to Buy provides aid to aspiring home buyers, allowing them to put down a deposit of just 5%.RBS is offering a two-year fixed rate mortgage under the scheme at 4.99%.The government has applauded the programme for assisting home buyers and providing a boost to the property market. However, critics have said the scheme would cause overheating prices in the housing sector. Lloyds Banking Group's Chief Executive António Horta-Osório warned that Help to Buy risks creating a housing bubble where demand outpaces supply.He said the programme would only work if steps are taken to free up planning restrictions and increase the supply of new housing. "It is important that planning permits, building authorisations and social housing projects are [liberalised] so that the increase in [mortgage] transactions does not lead to a substantial increase in house prices," Horta-Osório told the Financial Times.