LONDON — Britain’s government launched on Tuesday a $19 billion program to help first-time home buyers, a landmark plan that tries to offset banks’ reluctance to lend but which critics argue could create a new property bubble.
Under the plan, potential home buyers will need to put down 5 only percent of the home’s value, rather than the standard 20 percent that most banks are demanding. The government will guarantee the remaining 15 percent in the event of a default.
The government started this portion of the program earlier than planned after the first phase, which offered government loans to help buyers of newly built homes make their down payments, proved very popular.
Critics suggest the program, called Help to Buy, will fuel a surge in the market, where prices are already increasing even though the economy remains weak. Fears of a new housing bubble are growing.
The program has a threshold value of 600,000 pounds, or about $272,000.