Govt Takes Interest On Investors' Mail Funds

By Mark Kleinman, City Editor

The Government has earned hundreds of thousands of pounds in interest from private investors who saw their applications to buy Royal Mail shares snubbed by ministers.

Sky News understands that hundreds of thousands of members of the public who applied for more than £750 in the postal operator's shares, and who transferred their money ahead of a deadline earlier this week, will not see the interest on those funds returned to them.

More than £3.8bn of orders for Royal Mail stock were received from so-called retail investors, with that part of the privatisation seven times oversubscribed.

Some of those orders were placed through intermediaries and did not require money to be transferred in advance, but many thousands of people are understood to have paid via debit cards on a dedicated website.

The Government is due to return the excess funds to would-be investors by October 21, meaning that it could have held the money in an interest-earning account for as long as three weeks.

One analyst calculated that the Government was likely to have earned hundreds of thousands of pounds in interest from these investors' funds.

The Department for Business, Innovation and Skills (BIS) declined to comment on what proportion of the £3.8bn in orders from private investors had been paid up-front.

Its retention of the interest from unused funds is likely to stoke anger from investors who failed to receive their desired allocation. Individuals who applied for more than £10,000-worth of shares were excluded from the sale altogether.

A BIS spokesman said:

"Details of how refunds to retail investors would be made and by when and when they will be issued were clearly set out in the terms and conditions contained in the prospectus - the document all investors should have based their investment decision on."

"Funds from retail investors have been held in a low interest bank account on Government's behalf. Any interest gained on this money will be returned to Government."

Courtenay Humphries, a private investor who applied for £10,000 of shares and received an allocation of £750, said: "In this day of Internet banking I would have thought it unnecessary to take more than the required amount from my debit card in the first place.

"As for low interest accounts I would be happier if they stated the actual interest they are getting for it and what they intend to do with their ill-gotten gain."

More than £30bn in orders were also received from institutional investors, hundreds of whom missed out altogether because of the level of demand.

Others saw their allocations scaled back, although the Government did sell millions of pounds-worth of shares to sovereign wealth funds in Kuwait and Singapore.

The institutions did not pay in advance, in accordance with conventional practice on share offerings.

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Royal Mail Shares Soar In First Trades

By Mark Kleinman, City Editor

Nearly 150,000 Royal Mail staff were sitting on shareholdings worth more than £3,000 after a first day of trading that left the Government exposed to accusations that it had vastly undervalued the company.

The postal operator's shares ended conditional trading on Friday up 38% on their sale price of £3.30, capping a session in which institutional investors engaged in a stampede aimed at bulking up their holdings.

The frenzied trading followed the vastly oversubscribed demand for shares which saw more than £40bn in orders received by advisers to the Government.

The closing price of 455p gave Royal Mail a market value of £4.55bn, meaning it would be guaranteed entry to the FTSE-100 index when its next quarterly review takes place before the end of the year.

Royal Mail employees now hold shares worth £455m after being handed 10% of the company by ministers keen to smooth the path to privatisation. However, they are unable to sell the stock without incurring a tax liability for five years.

At the closing price, each employee's shares were worth just over £3,033.

Royal Mail's eleven board directors also benefited from the surge in the share price. The collective owners of 33,557 shares, the directors were sitting on stock worth £152,685, a profit of more than £40,000 on the day.

Ordinary retail investors who received the basic allocation of £750-worth of shares were sitting on a paper profit of more than £270m, with many expected to try to sell their holdings when full trading gets underway next Tuesday.

Vince Cable, the Business Secretary, told Sky News that allegations that the Government had undervalued Royal Mail were "nonsense", but a continued upturn in the share price in the coming weeks would lead to uncomfortable questions about the advice given to ministers and the fees paid to the investment banks working on the privatisation.

Chuka Umunna, the shadow business secretary, said Royal Mail had been "significantly undervalued with taxpayers being left short changed. Vince Cable has shown how out of touch he is in dismissing the hundreds of millions of pounds which the taxpayer could have lost out as 'froth' at a time when families across Britain are facing a cost of living crisis."

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Royal Mail Shares: Thousands Miss Out

By Mark Kleinman, City Editor

Thousands of UK taxpayers will miss out on the biggest privatisation in a generation after the Government confirmed the sale of nearly £2bn of shares in Royal Mail.

Ministers confirmed after the UK stock market closed on Thursday that they would price the postal operator's stock at 330p-a-share, giving it a market value of £3.3bn.

The price was at the top of an indicative range, fuelled by massive demand from private and institutional investors who placed orders for approximately £45bn-worth of shares.

The Government said every private investor who applied for the minimum £750 investment would receive that amount, but anyone who applied for more than £10,000 of shares would receive none.

In all, 270,000 will get at least half of the shares they applied for, it said.

Demand from private investors was seven times over-subscribed, with Vince Cable, the Business Secretary, saying there had been 700,000 applications.

The share sale - which has been bitterly opposed by trade unions as well as Labour politicians, who have accused the Coalition of undervaluing Royal Mail - will raise at least £1.72bn, and potentially as much as £1.98bn if an option to sell a further 8% of the company is exercised.

Insiders said that that was almost certain to happen once Royal Mail shares begin unconditional trading next week.

The decision to exclude thousands of private investors is likely to be controversial, particularly as the Government has, as Sky News revealed on Thursday, allocated millions of pounds of shares to state funds from Kuwait and Singapore.

Around 150,000 Royal Mail staff will each get about £2,200 of free shares.

Mr Cable said the privatisation would not deflect the Government from its pledge to protect consumers and that it had delivered "good value for money for the taxpayer".

The sale would deliver "a stable long-term ownership structure that will enable Royal Mail to be a successful enterprise and to raise commercial funding to invest", he added.

The 501-year-old institution hopes the money from the privatisation will allow it to secure its long-term future in an increasingly competitive delivery market.

Conditional trading of shares will begin on Friday, when institutional investors are allowed to trade with one another, with full trading getting under way next Tuesday, the day before the result of a strike ballot by postal workers.

Members of the Communication Workers Union are expected to back industrial action over issues linked to pay and conditions, with any strike set to be held on or after October 23 - the start of the run-up to the busy Christmas period.

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Royal Mail: Sovereign Funds To Get Shares

By Mark Kleinman, City Editor

A clutch of the world's most powerful sovereign wealth funds are expected to be allocated millions of pounds-worth of shares in Royal Mail even as thousands of British investors are frozen out of the privatisation.

Sky News can reveal that state-backed entities from Kuwait and Singapore are among those which ordered shares worth hundreds of millions of pounds as part of the postal operator's sell-off.

The Kuwait Investment Office, the City-based branch of the Gulf state's sovereign fund, and the Government Investment Corporation (GIC) of Singapore are expected to have their share applications scaled back because of the huge demand for Royal Mail stock.

Sources close to the privatisation said, however, that the two funds were expected to be allocated some shares because of ministers' desire to see Royal Mail have a geographically-diverse investor base when it moves into private ownership.

That decision may prove to be contentious because some British private investors are likely to be excluded because they placed orders for more than £10,000-worth of Royal Mail shares.

Ministers are expected to argue that those who placed orders for more than £10,000 were professional rather than private investors, although observers pointed out that many of them - understood to number in the handful of thousands - were likely to be core Conservative voters.

"They're taking a big risk given that there is a sufficient retail allocation to give all 700,000 people who applied the basic £750," said one.

Insiders said the Government would give those who applied for the minimum £750 of shares their full entitlement, but would scale back the allocation to those who ordered between £750 and £10,000.

Final decisions about the allocation of stock will be made until later on Thursday, with a Government announcement likely later in the day or on Friday morning before conditional trading in the shares gets under way.

The presence of sovereign wealth funds on the new share register of Royal Mail will reflect the diverse geographical ownership of most publicly-quoted blue-chip UK companies.

Sky News revealed earlier this week that there had been more than £30bn of orders by institutional investors for the available shares.

Roughly 150,000 Royal Mail employees will be handed 10% of the company, equivalent to a stake worth £330m at the sale price of 330p-per-share.

The Department for Business, Innovation and Skills and Royal Mail declined to comment.

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High Rate Travel Firm Numbers Are 'A Disgrace'

Travel companies should be banned from using high rate telephone numbers for customer services or complaints, a watchdog has demanded.

Which? said 70% of travel firms are using the numbers, and renewed its call for such companies to be subject to an EU rule which states helplines must be charged at no more than the basic rate.

The consumer group found the worst offender was airline Jet2.com, which charges 60p per minute on an 09 premium rate number for its general inquiries helpline.

Which? executive director Richard Lloyd said: "Going on holiday is meant to be a pleasure but there is nothing fun about being whacked with a costly call.

"It's a disgrace that people face bumper bills just to ask a question or make a complaint about their travel booking.

"The Government should close the loophole that allows travel companies to use costly phone numbers without delay."

Airlines including Ryanair, Monarch, FlyBe, KLM, Aer Lingus and Lufthansa also use 0871 numbers for reservations, complaints or other customer inquiries.

Which? also found 15 of the biggest train operators use 0844 or 0845 numbers for their customer helplines.

The investigation found 24 of the 38 airlines included in the study give high rate numbers for consumers to call for customer service or to complain, while 11 ferry companies give 0871, 0872, 0845 or 0843 numbers for customer inquiries.

Coach firms National Express and Eurolines use 0871 numbers for both customer service or complaints, Green Line uses an 0844 number for both, and Megabus has an 0871 number for customer service.

The 0871 numbers in the travel sector typically cost at least 10p per minute to call from a landline, but could be substantially more from a mobile phone, Which? said, while 0844 and 0871 numbers are not included as standard in inclusive call packages from landlines or mobiles.

Jet2.com said all booking calls would be free from October 20 and customers calling the airline's general inquiries number would be charged at the national rate.

Steve Lee, commercial director of Jet2.com and Jet2holidays, said: "We are in the process of moving our Jet2.com call centre to our headquarters in Leeds from South Africa, so it made sense to review the call charges for our inquiry lines."

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IMF Issues $2.3trn Warning Over QE's End

By Ed Conway, Economics Editor, In Washington

Investors could be facing a potential loss of $2.3trn (£1.44trn) if the world's central banks cannot smoothly unwind the emergency measures carried out during the financial crisis, the International Monetary Fund (IMF) has warned.

For the first time, the Fund put a number on the potential impact of a messy end to quantitative easing, as central banks, led by the Federal Reserve, bring their unconventional monetary measures to an end.

The calculation comes on the very day President Obama is to nominate Janet Yellen as the first female head of the Fed, the US central bank.

Yellen comes into the job with the Fed on the brink of bringing its latest phase of quantitative easing, under which it has been creating money and buying up $85bn (£53bn) of bonds each month, to an end.

In its Global Financial Stability Report, the IMF warned that if investors took fright at the end of QE, pushing up the interest rates on government bonds around the world by a percentage point, investors would suffer a 5.6% loss on their bond portfolios – equivalent to $2.3trn.

This equates to more than half the losses on assets faced during the height of the financial crisis.

Although the Fund said that such an outcome was less likely than a smooth, gradual increase in interest rates, which would not imply as great losses, its warning comes amid consternation at the scale of the task for the Fed – and indeed other central banks including the Bank of England – in the coming years.

Ms Yellen's nomination brings to an end one of the most testy and public appointment processes for a Fed chairman in history.

The other front-runner for the job, former Treasury Secretary Larry Summers, withdrew last month after it emerged that, although he was favoured by President Obama, he was unlikely to get Congressional approval.

Ms Yellen, deputy to the current Fed chairman, Ben Bernanke, was widely seen as the favoured choice of economists – but the President had been less enthusiastic.

Her four-year term is likely to be among the most testy in Federal Reserve history, as the central bank attempts to deflate the bond bubble created around the world by quantitative easing.

In the wake of the crisis, the Fed and its fellow central banks pumped trillions of dollars worth of cash into the financial system.

This is thought to have lessened the immediate pain of the recession; however, economists fear it will be difficult to wean markets off the sugar high created by this money.

Ms Yellen, who is married to Nobel laureate George Akerlof, will become the first female chair since the Fed was created a century ago.

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Economy: IMF Makes UK Growth Forecast U-Turn

By Ed Conway, Economics Editor, In Washington

The International Monetary Fund (IMF) has upgraded its forecast for UK economic growth by more than any other major economy, in a boost to the Chancellor's fortunes.

It comes only six months after the IMF downgraded its expectations for the British economy and warned that George Osborne's policies were the economic equivalent of "playing with fire".

In its six-monthly World Economic Outlook, the IMF predicted that the UK's gross domestic product - the broadest measure of economic growth - would increase by 1.4% this year and 1.9% in 2014.

That compares to a forecast of just 0.9% and 1.5% respectively when it last updated its projections in July.

It came as the IMF downgraded its forecast for global GDP this year by 0.3 percentage points to 2.9%.

The rapid change in attitude will be welcomed by the Chancellor, who is due to attend the IMF's annual meeting in Washington later this week.

In April, IMF chief economist Olivier Blanchard warned that austerity policies of the kind Mr Osborne was carrying out were "playing with fire" and urged him to change course.

However, over the following months, the IMF appeared to water down its prescription.

Ed Balls argues the UK economy remains below its potential

Treasury insiders see today's forecast revision as a tacit acknowledgement that Mr Osborne's original course was the right one.

A spokesman said: "The IMF has confirmed that the UK economy is turning a corner, by revising up its forecast for growth over the next two years by more than for any other G7 economy.

"But risks to the global economy remain high, and the recovery cannot be taken for granted. That is why the government will not let up in implementing its economic plan which has already cut the deficit by a third, kept interest rates near record lows and created over a million and a quarter jobs."

However, the text of the IMF report itself did not offer a ringing endorsement of the UK economy.

"In the United Kingdom, recent data have shown welcome signs of an improving economy, consistent with increasing consumer and business confidence, but output remains well below its pre-crisis peak … output levels will remain below potential for many years," it said.

Labour Shadow Chancellor Ed Balls said: "After three wasted years of flatlining it's good that we finally have some growth. But this is the slowest recovery for 100 years and working people are worse off as prices continue rising faster than wages.

"Despite these welcome changes to its forecasts the IMF rightly warns that the UK economy will remain below potential for many years.

"That's why the IMF has repeated its view that the Government should bring forward infrastructure investment now, which could be used to build thousands of affordable homes.

"Instead of more complacency from George Osborne we need action to secure a strong and sustained recovery, catch up all the lost ground and tackle the cost of living crisis," he concluded.

The report said that the global economy was now beginning to recover from the Great Recession, but warned that central banks would find it difficult to bring the unprecedented series of emergency crisis measures to an end.

George Osborne (R) will see the U-turn as a vindication of his policies

The Federal Reserve has signalled that it will soon begin tapering the amount of assets it is buying each month under its quantitative easing programme, but stopped short of doing so at its meeting last month.

It said that the world would have to adapt to a slower potential growth rate from China - for the past five years the powerhouse for global growth.

However, the IMF reserved its most serious warning for the US Congress, which is currently deadlocked on talks over the budget, causing a part-shutdown of federal services.

It has also been unable to pass legislation to increase the US debt ceiling, something which could potentially cause the first US default in history.

The IMF said that its forecasts assumed the shutdown would be brief, that extra public spending would be agreed and that the debt ceiling would be raised.

"There is uncertainty on all three accounts," it added.

"While the damage to the US economy from a short shutdown is likely to be limited, a longer shutdown could be quite harmful. And, even more importantly, a failure to promptly raise the debt ceiling, leading to a US selective default, could seriously damage the global economy."

An added worry is that across the world, the recovery could be more tepid than normal.

Long-term average growth across the world is usually close to 4%. However, the IMF said that in the medium term it might only be realistic to expect something closer to 3%, given the serious impact of the Fed and other central banks reversing their quantitative easing programmes.

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Help To Buy Scheme: First Rates Are Revealed

The first mortgage rates on offer under the latest phase of the Government's Help to Buy scheme have been described by the lender as "fair and competitive."

The second phase of the controversial scheme - aimed at helping more people get on the property ladder - sees Help to Buy extended to cover old homes too instead of just new-build properties.

It will see 15% of a property's value guaranteed by taxpayers, in return for a fee from the lender, to help homebuyers obtain mortgages worth up to 95% of a property's value.

RBS and its Natwest subsidiary said they would be offering two and five-year fixed rate deals at 4.99% and 5.49% interest rates respectively with no fee. The brands expect a rush of interest - signing up 25,500 first and next time buyers over three years.

Virgin Money is among the lenders taking part

The banks confirmed 740 of their branches would extend opening hours for two weeks to cope with expected demand but Lloyd Cochrane - their head of mortgages - told Sky News there would be no reckless lending with potential customers facing tough affordability checks.

He said: "We ensure based on what they earn and what they spend that they can afford the mortgage now but really importantly we ensure they can afford the mortgage at a rate of 7% so that gives us and our customers the confidence that they can afford the mortgage into the long term."

Halifax - owned by Lloyds Banking Group - later confirmed its offering: A two-year fixed rate at 5.19% with a £995 product fee and said customers would be able to apply for the mortgages from Friday.

HSBC said it would be taking part later in the year, making it the first major player with no taxpayer support to sign up.

Virgin Money and the start-up Aldermore Bank will join from January while Barclays and Santander UK are still considering whether to participate.

The scheme had initially not been expected to start until the new year but was brought forward by three months.

The PM wants mortgages to be affordable for many

It will offer £12bn in mortgage guarantees over three years and some estimates suggest 180,000 loans could be taken out under the initiative.

Lenders can start offering the mortgages from today, and they will be guaranteed by the Government from January 2014.

Prime Minister David Cameron said: "Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out."

Chancellor George Osborne said: "Too many people are still being denied the dream of owning their own home, which is why we have brought forward the launch of this scheme, so as of today borrowers can start applying for a mortgage with a 5% deposit."

The new scheme means homebuyers will only have to find as little as 5% on homes worth up to £600,000. Depending on the size of the deposit, the Government will then guarantee up to 15% of the property value in return for a fee from the lender.

An earlier phase of the scheme, offering 20% loans on new-build properties, has already helped more than 15,000 people buy a new home since it was launched six months ago.

Help to Buy is controversial because critics fear it could fuel further rises in a housing market where prices are already going up.

But the Treasury said that while house price inflation stands at 3.3%, it is only 0.8% when the property hotspots of London and the South East are removed.

The latest report on the market from the Royal Institution of Chartered Surveyors (Rics) suggested prices were likely to surge further ahead in London and the South East because the supply of homes was lagging behind burgeoning demand.

It measured home sales at a four-year high last month but remaining historically low.

Commenting on the launch of phase two of Help to Buy, shadow chief secretary to the Treasury Chris Leslie said: "If ministers are serious about helping first-time buyers, they should bring forward investment to build more affordable homes.

"Rising demand for housing must be matched with rising supply, but under this Government house-building is at its lowest level since the 1920s."

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Scottish Independence: Defence Jobs Warning

By Alistair Bunkall, Defence Correspondent

Thousands of jobs could be lost in the defence industry if Scotland votes for independence, the Defence Secretary will warn.

Philip Hammond will set out the commercial benefit of the Union as he speaks at an Edinburgh defence technology firm. 

"The Scottish people deserve to know what the impact of independence would be on the jobs and livelihoods of the many thousands of people in Scotland that are employed in the UK Armed Forces or in the defence industry that equips and supports them," he will say.

"Less than a year before the Scottish people go to the ballot box to take one of the most important decisions in the history of Scotland, the SNP's plans remain insultingly vague - a two-page wish list that is neither costed nor credible."

Mr Hammond's speech coincides with the publication of an 86-page consultation paper.

Mr Hammond says thousands of defence industry job would be lost

It concludes that the UK investment and legal exemptions which protect jobs in the defence sector cannot and would not transfer to an independent Scotland.

Companies with a base in Scotland would be exempted from contracts deemed sensitive by the Westminster Government.

It is probable that BAE Systems would close its two Scottish shipyards in the event of independence.

The UK has not commissioned a naval ship to be made outside of UK sovereign territory since World War II for national security reasons and so BAE would likely seek to protect its primary source of work.

More than 12,600 people are employed by the defence industry in Scotland.

The SNP has made it clear that it would not allow the UK nuclear deterrent to remain in Scotland.

However Nato has insisted that Scotland would have to earn its place in the alliance and any Scottish attempts to remove Trident would be viewed in a dim light.

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Help To Buy Scheme Could Secure 180,000 Loans

Banks are expecting a flood of interest as the latest phase of the Government's Help to Buy scheme is launched.

The move will help homebuyers obtain mortgages worth up to 95% of property values.

And in the latest phase of the controversial scheme 15% of a property's value will be guaranteed by taxpayers, in return for a fee from the lender.

Prime Minister David Cameron said: "Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out."

Chancellor George Osborne said: "Too many people are still being denied the dream of owning their own home, which is why we have brought forward the launch of this scheme, so as of today borrowers can start applying for a mortgage with a 5% deposit."

Taxpayer-backed Royal Bank of Scotland and its subsidiary NatWest immediately set out mortgage deals under the scheme and announced that 740 of its branches would extend opening hours for two weeks to cope with expected demand.

Halifax and Bank of Scotland, owned by the state-backed Lloyds Banking Group, will start offering loans under the scheme on Friday but the Lloyds brand itself is not taking part.

The Treasury also announced that Virgin Money had signed up while the start-up Aldermore Bank has also said it will join.

Both will take part from January and Aldermore is exploring whether the date can be brought forward.

A Treasury spokesman said the lenders involved so far represented more than 30% of the mortgage market and that more lenders were expected to indicate participation in the coming months.

The scheme had initially not been expected to start until the new year but has been brought forward by three months.

It will offer £12bn in mortgage guarantees over three years and some estimates suggest 180,000 loans could be taken out under the initiative.

An earlier phase of the scheme, offering 20% loans on new-build properties, has already helped more than 15,000 people buy a new home since it was launched six months ago.

Help to Buy is controversial because critics fear it could fuel further rise in a housing market where prices are already rising.

But the Treasury said that while house price inflation stands at 3.3%, it is only 0.8% when the property hotspots of London and the South East are removed.

The new scheme means homebuyers will only have to find as little as 5% on homes worth up to £600,000. Depending on the size of the deposit, the Government will then guarantee up to 15% of the property value in return for a fee from the lender.

Lenders can start offering the mortgages from today, and they will be guaranteed by the Government from January 2014.

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Crunch Time In £350m Wagon Wheels Auction

By Mark Kleinman, City Editor

More than half a dozen bidders have tabled offers for the owner of Wagon Wheels, the UK's second-biggest biscuits manufacturer.

Sky News understands that a field of predominantly financial investors submitted initial bids last week in the first stage of an auction that could raise £350m for the current owners of Burton's Biscuits.

Among the private equity groups which lodged their interest in a takeover of Burton's, according to sources close to the process, were Apax Partners, Capvest, Charterhouse and Pamplona Capital.

The giant Ontario Teachers Pension Plan, which owns Camelot, the Lotto operator, also made an offer, while Two Sisters, the owner of Fox's Biscuits, is understood to have been planning to bid.

A sale of Burton's will entail a change of ownership for another portfolio of prominent UK food brands following the sale several months ago of the snacks division of United Biscuits (UB), which included Hula Hoops and KP Skips among its products.

Burton's is Britain's second-largest biscuits manufacturer by sales, behind UB, which is also owned by two private equity groups, Blackstone and PAI Partners.

As well as Wagon Wheels, Burton's produces Jammie Dodgers, Cadbury Biscuits, Lyon's and Maryland cookies.

Based in St Albans, Hertfordshire, Burton's traces its roots back to the mid-1800s when it was founded by George Burton.

It employs more than 2,200 people around the UK in three manufacturing facilities in Llantarnam, Edinburgh and Blackpool, a chocolate refinery in Moreton and a central distribution hub in Liverpool.

Burton's is one of a sizeable number of mid-sized British companies which has been through several phases of private equity ownership.

In 2009, Apollo and CIBC, the Canadian bank, seized control of the company after Duke Street Capital, its previous owner, was forced to surrender control to the biscuit-maker's lenders.

Another private equity group, HM Capital, had bought the company in 2000 from Associated British Foods, owner of the Primark retail chain.

The auction of Burton's will pre-empt that of UB, which is expected to be put up for sale in the next couple of years.

UB, which now consists solely of a biscuits business, owns the McVitie's brand, which includes products such as Jaffa Cakes and Penguin.

Burton's declined to comment.

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Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme Help to Buy launches today, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market, and a statement from one bank saying it cannot confirm whether it will take part in the scheme, means some would-be buyers could be left empty-handed.

Exclusive research by Sky News shows interest from potential buyers has skyrocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative Party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

There is concern that pent-up demand cannot be met by existing market services, while Barclays has issued a statement saying it is not able to guarantee a launch date.

The policy offers homebuyers loans of up to 20% towards a property

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

RBS and Natwest however, have said they are ready to take part in the scheme when it goes live and are planning to extend opening hours in many branches to deal with demand.

"From launch date customers will be able to visit any of our 2000 branches or call us to see how we can help them to get ahead on the property ladder through the scheme," said a statement.

Lloyds Banking Group will also be participating in the second stage of Help to Buy - but exact timings are currently unclear.

"We will be introducing a range of products shortly through our Halifax (and Bank of Scotland) brand, enabling customers to benefit from 95% borrowing this year," said a spokesperson.

However, some estate agents are still worried about a lack of capacity to deal with interest in the scheme.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered and taking a long time to be verified on values."

Despite the concerns, the government insists that the scheme is still on track to be a success.

A Treasury statement said: "Two major lenders - Lloyds and RBS representing around 30% of total mortgage lending - have already announced that they will be launching new mortgage products because of Help to Buy.

"This is great news for those who can't get on - or move up the property ladder because of the huge cost of deposits."

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Help To Buy: Doubts Over Success Of Scheme

By Poppy Trowbridge, Business and Economics Correspondent

The second phase of the government mortgage guarantee scheme Help to Buy is due to launch next week, three months earlier than expected - but experts are sceptical the initiative will help buyers.

Lack of capacity in the housing market, and a statement from one bank saying it cannot confirm whether it will take part in the scheme, means some would-be buyers could be left empty-handed.

Exclusive research by Sky News shows interest from potential buyers has skyrocketed since the Government surprised the market.

Property website Rightmove says clicks on its Help to Buy pages numbered 14,807 on Saturday, the day before last Sunday's surprise announcement.

When David Cameron revealed, on the eve of the Conservative Party conference, that the launch date had been brought forward from January - clicks, measuring potential buyer interest, spiked to 59,571.

Now, almost a week later, they remain far above average at 23,660.

There is concern that pent-up demand cannot be met by existing market services, while Barclays has issued a statement saying it is not able to guarantee a launch date.

The policy offers homebuyers loans of up to 20% towards a property

"Whilst we cannot take a decision over participation in the new scheme before the terms are set, we are encouraged by the tone of the discussions so far," the bank said.

RBS and Natwest however, have said they are ready to take part in the scheme when it goes live and are planning to extend opening hours in many branches to deal with demand.

"From launch date customers will be able to visit any of our 2000 branches or call us to see how we can help them to get ahead on the property ladder through the scheme," said a statement.

Lloyds Banking Group will also be participating in the second stage of Help to Buy - but exact timings are currently unclear.

"We will be introducing a range of products shortly through our Halifax (and Bank of Scotland) brand, enabling customers to benefit from 95% borrowing this year," said a spokesperson.

However, some estate agents are still worried about a lack of capacity to deal with interest in the scheme.

Robert Ellice, of Clarke Hillyer, told Sky News: "At the moment we've got big delays in the whole process anyway, mortgages are still taking a long time to be offered and taking a long time to be verified on values."

Despite the concerns, the government insists that the scheme is still on track to be a success.

A Treasury statement said: "Two major lenders - Lloyds and RBS representing around 30% of total mortgage lending - have already announced that they will be launching new mortgage products because of Help to Buy.

"This is great news for those who can't get on - or move up the property ladder because of the huge cost of deposits."

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Goldman Fund Wins £720m Battle For Hastings

By Mark Kleinman, City Editor

A fund managed by the Wall Street banking giant Goldman Sachs will next week emerge as the biggest shareholder in Hastings, one of Britain's fastest-growing insurance companies.

Sky News understands that GS Capital Partners, Goldman's private equity arm, is to invest £150m in return for just under 50% of Sussex-based Hastings.

The insurer's founders and management will retain the rest of the shares, with Neil Utley, Hastings' chairman, crystallising a fortune worth tens of millions of pounds from the sale of part of his stake.

Hastings will announce the equity investment alongside the launch of a bond issue that will raise approximately £420m.

In total, the transactions will value the insurance company at £720m, making it a strong candidate to enter the FTSE-250 index if it lists on the stock market as expected in several years' time.

Sumit Rajpal, a New York-based managing director at Goldman, is expected to join Hastings' board as part of the deal.

Hastings is focused on an aggressive expansion strategy following an acceleration in earnings before interest, tax, depreciation and amortisation (EBITDA) to roughly £70m last year.

The company has around one million customers, and Gary Hoffman, who joined last year as its chief executive, has stated a target of trebling that number by 2020.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007 which heralded the start of Britain's banking meltdown.

He then spent two years as chief executive of NBNK Investments, a vehicle set up to acquire retail banking assets, but which was rebuffed in favour of the Co-operative Group in the contest to buy 632 branches from Lloyds Banking Group.

That deal collapsed amid a financial crisis at the Co-Op earlier this year.

Based in Bexhill, East Sussex, Hastings employs more than 1400 people, over 80% of whom are understood to be shareholders in the company.

Hastings' valuation from a deal has been buoyed by its recent financial performance as well as the successful flotation on the London Stock Exchange of rivals such as Direct Line Group, although another competitor, Esure, has seen its shares slide since listing.

Mr Hoffman's arrival last year triggered suggestions that Hastings would also look to go public, but the company has no plans to do so.

Acquired by Insurance Australia Group in 2006, Hastings changed hands again in 2009 when it was subject to Mr Utley's management buyout.

Evercore and Peel Hunt, two City firms, have been advising the company on the talks about a stake sale, while Credit Suisse and JP Morgan have been overseeing the bond issue.

Neither Goldman nor Hastings could be reached for comment on Saturday.

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