Govt confirms launch of mortgage guarantee scheme

The government-backed 95% LTV mortgage guarantee scheme is launching today, the Ministry of Housing has confirmed.

The scheme is intended to help first-time buyers or current homeowners secure a mortgage with a 5% deposit.

First announced in Rishi Sunak’s Budget last month, the Chancellor revealed the scheme would be to help both first-time buyers and current homeowners secure a 95% LTV mortgage to buy a house of up to £600,000. The government has described the scheme as an “affordable route to home ownership for aspiring homeowners”.

The scheme is now available from lenders on high streets across the country, with the likes of Lloyds, Santander, Barclays, HSBC and NatWest launching mortgages under the scheme today and Virgin Money to follow next month.

Housing Secretary, Robert Jenrick, commented: “The new mortgage guarantee scheme which comes into effect today will give providers the confidence to lend and help families and young people get on the property ladder without the prohibitive burden of a large deposit.

“Despite the challenges faced over the past year, the government has intervened to protect jobs, support builders and buyers to help keep the housing market healthy. Today’s 95% mortgages launch further strengthens our commitment to build back better from the pandemic.

“In recent years we’ve reversed the trend and seen a positive increase in owner-occupiers. We’re determined to build on this through the range of flexible ownership options which help ensure home ownership is achievable. We want to match the ambitions of aspiring homeowners up and down the country.”

According to government figures, more than two-thirds of private renters (68%) and those living at home (72%) want to buy a home, with the majority suggesting the pandemic has made them more aware of the importance and benefits of home ownership.

This study also found that 76% of private renters as well as 70% of those living at home have started saving for a deposit or put more money into their savings during the pandemic.

Propertymark chief policy advisor, Mark Hayward, added: “Over the past few months, there has been an increase in the number of prospective buyers and the number of house sales taking place. Coupled with the decision to extend the stamp duty holiday further, the mortgage guarantee scheme will provide additional options for more people to become homeowners.

“Access to finance and affordability plays a key role in the ability for people to purchase their dream home, so we are now very pleased to see further support for both first-time buyers and current homeowners looking to buy property or move up the housing ladder.”

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