Some 85 per cent of the people who used the scheme were first-time buyers and the total value of mortgages completed came to £4.4bn.
So far this year, May has seen the highest number of completions under the scheme at 2,205 during the month. The use of the scheme has steadily risen since the start of the year from 1,692 in January to 2,127 in June.
Karen Noye, mortgage spokesperson at Quilter, said: “Given the struggle first-time buyers face, it is rather surprising that the number of mortgages completed with the help of the government’s mortgage guarantee scheme remains relatively low – with just 24,153 mortgages completed between April 2021 and June 2022.
“While use of the scheme is relatively low, it is seeing a gradual uptick in popularity. In its first full year – April 2021 to March 2022 – a total of 17,996 mortgages were completed with the support of the scheme. In comparison, in just the first three months of its second year – April to June 2022 – a total of 6,157 were completed.”
Lender product withdrawal may encourage need for scheme
Noye added: “However, while the takeup has been modest at best so far, this is partly as a result of lenders identifying the gap in the market prior to the government’s implementation of the scheme and therefore offering their own 95 per cent mortgage products.
“Given lenders are now tightening their offerings and many have reduced or removed the high LTV mortgages they offer, we could see a further uptick in the use of the government scheme as more people are forced to rely on it.”
Mostly used on lower valued homes by lower income households
The mean value of a property purchased or remortgaged through the scheme was £191,378, compared to average house price of £295,903.
Properties with values between £0 and £125,000 accounted for 27 per cent of activity, making up the largest share. This was followed by homes with a value of between £150,001 and £200,000 which has a 24 per cent share. Just one per cent of homes purchased or remortgaged through the scheme had a value between £500,001 and £600,000.
The majority of completions through the scheme have been against terraced houses, which made up 35 per cent of transactions. Some 24 per cent of mortgages were used on flats or maisonettes while detached houses and bungalows made up seven per cent and three per cent respectively.
Takeup of the scheme has been lower for those on higher incomes with 57 per cent of recipients having household incomes below £50,000. The greatest proportion of use was among those with household incomes between £40,001 and £50,000 at a 22 per cent share, and incomes between £30,001 and £40,000 at a 19 per cent share.
Those with incomes over £80,000 made up 11 per cent of completion. The median household income for borrowers of the scheme was £46,514 while the mean household income was £51,354.
Regional takeup
Most transactions occurred in England, making up a 63 per cent share of completions. The South East and North West had the largest shares in the country accounting for 10 per cent and 12 per cent of completions respectively.
Takeup was lowest in Northern Ireland, London and the North East, where just three per cent, four per cent and five per cent of completions took place respectively.
