A mortgage guarantee scheme to help prospective homeowners with smaller deposits onto the property ladder is set to be announced in the Budget on Wednesday 3 March.
A mortgage guarantee scheme to help prospective homeowners with smaller deposits onto the property ladder is set to be announced in the Budget on Wednesday 3 March.
As part of the scheme, the government will offer incentives to lenders in order to encourage them to resume offering 95% LTV mortgages.
According to reports, the scheme will not be limited to first-time buyers, however, there will be a maximum property limit of £600,000.
Phil Bailey, sales director at Twenty7Tec, said: "Mortgage activity levels since the stamp duty announcement have remained consistently high.
“Pushing up house prices, creating more competition and higher demand in the first time buyer market.
“A potential 95% LTV mortgage scheme, backed by the governance and sitting alongside Help to Buy would go a long way in providing lenders with the confidence they need to further support this area of lending.”
Bailey went on to say that lenders continue to be cautious and although high LTV products have begun to return, affordability, criteria and increased difficulty in securing these higher-risk mortgages continues to be challenging.
He added: “If the government wants to achieve its new homes target at any point, a scheme to support the buyers of these properties is required."
Matthew Carter, head of product at Coventry Building Society believes that any initiative that helps people buy their first home is a welcome move.
He said: “We look forward to seeing the full details when this is formally announced by the Chancellor on Wednesday.”
