In the hectic few days before Christmas many of us will have missed this positive bit of news for the residential housing market. On 20th December the government announced that the Mortgage Guarantee Scheme will be extended for another 12 months until the end of December this year, instead of finishing on December 31st 2022 as originally planned. First introduced in April, 2019, this government-backed scheme is designed to help those with only a 5% deposit to get on to the housing ladder.
As of November 2022, the Mortgage Guarantee Scheme had already helped over 24,000 households to buy a property, with 85% of these being first-time buyers. Prior to the announcement many experts had expressed concern that ending the Mortgage Guarantee Scheme would make it extremely difficult for those with only a small deposit to access a mortgage, and the extension for another 12 months will mean that 95% mortgages remain more widely available.
Under the scheme the government gives financial guarantees to lenders so that they are able to offer mortgages to cover 95% of the loan, with the borrower’s deposit accounting for the initial 5% of the property’s value. First-time buyers and anyone buying property up to £600,000 are covered by the scheme, subject to standard affordability checks. Both existing and new-build properties can be bought under the scheme, although only repayment mortgages are permitted, not interest-only ones.
Commenting on the announcement, Chief Secretary to the Treasury John Glen said: “For hard-working families facing today’s challenging economic conditions, it’s right that we continue to help them secure their first home or move into their dream house. Extending this scheme means thousands more have the chance to benefit, and supports the market as we navigate through these difficult times.”
Bretherton Law have been serving the people of Hertfordshire for over 50 years. Our team of experienced Property Lawyers will ensure that whether you are buying or selling, the conveyancing process will run smoothly and professionally. We offer a same day response promise as well as fixed fee quotes. Bretherton Law are accredited under the Lexcel legal practice and the Law Society’s Conveyancing Quality Schemes. Contact us on 01727 869293 or use the contact us form.
For further information go to: Government Extends Mortgage Guarantee Scheme
