As part of an update in the Spending Review, the government confirmed that it would make the mortgage guarantee scheme permanent to “ensure the consistent availability of mortgages for buyers with small deposits”.
No further details of the scheme have been shared at this time.
The mortgage guarantee scheme was launched by the previous Conservative government in 2021 to support higher-loan-to-value (LTV) lending, as the pandemic had led some lenders to retrench.
As part of the scheme, the government offers lenders the option to buy a guarantee on mortgage loans where the borrower has a deposit of less than 10%.
As part of its manifesto, the Labour Party said it would introduce a permanent mortgage guarantee scheme and has reiterated its commitment in its Autumn Budget and in February this year.
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The government said a permanent scheme would help get more first-time buyers onto the property ladder and give lenders confidence.
The latest figures from HM Treasury show that since it launched, there have been around 53,621 completions, which makes up around 1.4% of all residential lending over the past three years.
The current scheme is set to close on 30 June.
