Mortgage guarantee scheme set to help buyers with 5% deposits
In a further attempt to stimulate the housing market, Rishi Sunak will announce a mortgage guarantee scheme to help first time buyers purchase a property with just a 5% deposit.
The chancellor will deliver his Spring Budget on Wednesday 3rd March and is expected to include a number of measures which will affect the property market including extending the stamp duty holiday deadline and increasing capital gains tax.
The new scheme will offer incentives to lenders, bringing back 95% mortgages which the Treasury says have “virtually disappeared” during the Covid-19 pandemic.
The mortgage guarantee scheme, which is a replacement to the Help to Buy scheme that was introduced by George Osborne in 2013 is hoped by Treasury officials to bring a major boost to the property market.
According to the Ministry of Housing Communities & Local Government, in the period 1 April 2013 to 31 March 2020, 272,852 properties (under 5% of all transactions), were purchased with support from the Help to Buy Scheme , with a total value of properties sold under the scheme totalling £73.28 billion.
The total number of housing transactions decreased from approximately 1.128 million in 2019 to 0.65 million in 2020 according to statista.