The government-backed 95% mortgage guarantee scheme has launched today.
First announced at the Budget, the scheme will help first time buyers or current homeowners secure a mortgage with just a 5% deposit to buy a house of up to £600,000.
The initiative aims to help those with lower deposits onto the property ladder by offering lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.
The Chancellor, Rishi Sunak has described the scheme as
‘’a policy that gives people who can’t afford a big deposit the chance to buy their own home.’’
Today the scheme is available from a number of the big lenders across the country including; Lloyds, Santander, Barclays, HSBC, and Virgin Money are to follow next month.
Rightmove’s director of property data, Tim Bannister said:
‘’ Although the number of new properties coming to the market is improving, it’s still nowhere near enough to satisfy the buyer demand that is already at record levels, and so more people choosing to trade up will be vital to open up more choice at the start of the property ladder.’’
The scheme is one of a range of flexible home ownership options available which include: Help to Buy, Shared Ownership and the First Homes Scheme. The number of mortgage approvals for house purchases in January 2021 was 99,000 – a 40% increase on January 2020.
Part of the government’s Plan for Jobs, the scheme will help to support the housing market and protect jobs and businesses across the housing supply chain, from housebuilders and estate agents, to tradespeople, DIY stores and removal firms.
The intervention comes as new figures published by the government show a greatly increased desire for home ownership and a sharp reduction in 95% mortgage availability over the past year.
The Chancellor, Rishi Sunak said,
‘’ By giving lenders the option of a government guarantee on 95% mortgages, many more products will become available, boosting the sector, creating new jobs and helping people achieve their dream of owning their own home.’’
Housing Secretary Rt Hon Robert Jenrick MP said:
‘’ Despite the challenges faced over the past year, the government has intervened to protect jobs, support builders and buyers to help keep the housing market healthy. Today’s 95% mortgages launch further strengthens our commitment to build back better from the pandemic. Together we can turn ‘Generation Rent’ into ‘Generation Buy..’’
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