David Cameron brings forward Help to Buy scheme

A controversial scheme allowing people across the UK to take out 95% mortgages will be launched next week - three months earlier than planned.

PM David Cameron made the announcement as the Conservatives gathered in Manchester for their annual conference.

He rejected fears the Help to Buy scheme will fuel a housing bubble.

He told the BBC's Andrew Marr show the market was "recovering from a very low base" and first-time buyers needed help to get on the housing ladder.

"As prime minister I am not going to stand by while people's aspirations to get on the housing ladder are being trashed."

He added: "If we don't do this it will only be people with rich parents to help them who can get on the housing ladder - that is not fair, it is not right."

He rejected concerns - raised by Business Secretary Vince Cable among others - of an unsustainable boom in house prices, particularly in the south-east of England.

The prime minister urged people to "trust" the Bank of England, which has been given an enhanced role in monitoring the effect of the scheme on prices.

And he said mortgage-lenders, including the Halifax, RBS and Nat West, had already signed up to it.

Some of the UK's biggest lenders - HSBC, Santander, Nationwide and Barclays - have yet to decide whether to take part, the banks told the BBC.

Mr Cameron also used his Andrew Marr interview to stress that there would be no "mansion tax" if he his prime minister after the next election, making it clear that this would be a so-called "red line" - a point he would refuse to concede - in coalition negotiations.

A property tax on more valuable homes - known as a mansion tax - is a key demand of the Liberal Democrats.

Meanwhile, about 50,000 people took part in a union protest outside the conference against government austerity policies, particularly those affecting the NHS.

Greater Manchester Police described it as one of the largest protests they had ever policed.

In other developments:

Mr Cameron admitted to mistakes in the way the government handled the gay marriage issue, saying: "I don't think I expected quite the furore that there was."

He said he understood and respected people's difficulties with the policy and said the government had failed to convey the fact the policy would not affect what happened in churches, mosques and synagogues.

The Conservatives will use their week in Manchester to unveil a series of policies aimed at showing they are "on the side of hard working people". Other policy announcements are set to include a crackdown on welfare payments and an expansion of free schools.

Labour extended its lead in the opinion polls after announcing at its conference last week that it would freeze energy prices and increase corporation tax to pay for a cut in business rates for small firms.

Mr Cameron dismissed Labour leader Ed Miliband's economic strategy as "nuts," arguing that increasing tax on big business risked choking off the recovery.

He said the only way to "sustainably raise living standards is to keep the recovery going, and the economy is now moving, to keep on creating jobs...to keep on cutting the deficit."

Under the first phase of the Help to Buy scheme, launched in April, the government will give homebuyers in England equity loans of up to 20% of the price of a new property worth up to £600,000.

Homebuyers need to contribute at least 5% of the property price as a deposit, with a 75% mortgage to cover the rest.

Under the second phase of Help to Buy, which had been due to launch in January, the government will underwrite 15% of the value of a mortgage, allowing people to buy properties with a 5% deposit.

It will apply to all home purchases in the UK of up to £600,000.

Applications for loans from the scheme will now be brought forward to the week beginning 7 October but the loans will not be paid out until 1 January. Anyone hoping to complete on their home purchase using the second phase of Help to Buy before 2014 will not be able to.

Adam Marshall, of the British Chambers of Commerce, said: "With all the concern expressed about Help to Buy - rushing into it seems less than responsible on part of government."

House prices rose at their fastest rate in more than six years in September, according to property analysts Hometrack.

Labour said the government needed to build more houses to ease shortages.

"Unless David Cameron acts now to build more affordable homes, as Labour has urged, then soaring prices risk making it even harder for first time buyers to get on the housing ladder," said Shadow Chancellor Ed Balls.

"You can't deal with the cost of living crisis without building more homes, so it's no wonder that for millions of families this is no recovery at all.

It comes as a poll of more than 1,400 Conservative councillors in England and Wales for BBC One's Sunday Politics suggested nearly a quarter would support an electoral pact with the UK Independence Party (UKIP) at the next general election.

A Tory source said: "80% of our councillors didn't respond to this survey so it's hardly representative. It should be taken with a large pinch of salt."

The conference opened on Sunday with a tribute to former Prime Minster Baroness Thatcher, who died aged 87 in April.

It will close with Mr Cameron's keynote speech on Wednesday.