Government mortgage guarantee scheme sees slow uptake

The Government's flagship scheme to help first-time buyers get on the property ladder has only helped a tiny proportion of buyers in its first five months, new figures have revealed. The Government scheme “guarantees” the portion of a 95% loan-to-value mortgage over 80%– meaning they would partially compensate the lender if a buyer stopped paying. However, figures form the Treasury show that the scheme was used by 6,535 households between its launch on 19 April 2021 and 30 September. When he announced the mortgage guarantee scheme in 2021's March Budget, Chancellor Rishi Sunak said it would have the effect of “boosting the sector, creating new jobs and helping people achieve their dream of owning their own home.” However, it was undermined by the fact that, soon after the scheme launched, lenders started offering 5% deposit mortgages on their own terms, independent of the Government scheme. According to Yorkshire Building Society's analysis of UK Finance figures, there were 408,000 first-time buyers in 2021 as a whole. On average, that would mean 34,000 first-time buyers per month, or 170,200 in five months.

Daily Mail (18/02/2022)