The mortgage guarantee scheme was introduced in 2021 as a way to encourage lenders to re-enter the high loan to value (LTV) market and lend up to 95 per cent.
Much of this lending was withdrawn during the pandemic but the scheme saw the likes of Natwest and HSBC resume at this level.
The scheme was meant to end in December 2022 but in last year’s Autumn Budget it was announced that it would be extended by a year.
Some lenders have since withdrawn from the scheme and are now lending independently.
The most recent figures showed that since its launch, 37,376 mortgages had been completed through the scheme and 86 per cent of purchases were made by first-time buyers. The total value of mortgages provided through the scheme amounts to £7bn.
Ben Thompson, deputy CEO of Mortgage Advice Bureau, said: “It’s been a really challenging time for first-time buyers to get the keys in their hands. Economic volatility has seen potential buyers battle high inflation, pushing prices up and limiting the amount they can save. Meanwhile, the higher interest rate environment has lowered the amount they can borrow, meaning bigger deposits are needed.
“The government is right to look at support for those taking their first steps on the property market in the upcoming Autumn Statement, but extending the mortgage guarantee scheme is just one possible route. Other options on the table are a review of ISA products to support saving, or reforms to the existing products that savers are utilising.”
Stamp duty changes
It has also been reported that the government is planning a stamp duty cut.
The Times said Prime Minister Rishi Sunak and Chancellor Jeremy Hunt were looking at reducing stamp duty or getting rid of inheritance tax.
The Treasury declined to comment when contacted by Mortgage Solutions.
The Autumn Statement will take place on 22 November.