He said: “The new proposals from the Chancellor in his Budget speech effectively mean that this will be the first time since August 1988, when the Mortgage Interest Relief at Source initiative was abolished, that the UK government has had such a large direct involvement in the mortgage market.”
Chidgey said that FirstBuy and NewBuy were both quite narrow in comparison to Help to Buy which reminded him of the far reaching and popular MIRAS scheme of the eighties which allowed individuals to claim interest back on the first £30,000 of their mortgages.
Chidgey added: “MIRAS encompassed all types of people and all types of property so it is hard not to draw parallels between that scheme and the new Help to Buy which does not carry any income restrictions.”
MIRAS allowed the borrower to pay a reduced amount of interest, reflecting the gross interest that borrowers were liable to pay less the tax relief due, which lenders could recover from the Inland Revenue.
Brought in under the reign of Chancellor Roy Jenkins to encourage home ownership, the government began phasing it out in 1988 by adding restrictions to those who could apply.
