Following the Chancellor’s announcement of the new, Government-backed mortgage scheme, prospective homebuyers have eagerly awaited the launch. As thousands are set to benefit from the new Government-guaranteed mortgages, the launch of the scheme has caused excitement. After reaffirming the Prime Minister’s pledge to turn “generation rent” into “generation buy,” the new initiative will help many get on the property ladder. The scheme will see loans for 95% of property purchase prices that will be backed by the Government.
What do Government-guaranteed mortgages involve?
The Government will support the scheme on properties up to the value of £600,000. By requiring a deposit of just five percent, these mortgages are ideal for first-time buyers. However, they are also available to current homeowners who are looking to change their rate. Although similar to the Help to Buy scheme, these mortgage offers will not be exclusive to new build properties. In contrast, banks have confirmed they will not be lending against new build homes under this project.
Which lenders are part of the scheme?
During his address to Parliament at the Spring Budget meeting, Rishi Sunak announced some of the biggest names are participating. Barclays, NatWest, and Santander are some of the major lenders that have already launched their products. Over the coming weeks, more lenders are set to launch their deals, including Virgin Money.
Who will benefit from the Government-guaranteed mortgages?
Getting on the property ladder can be a daunting prospect for many potential first-time buyers? As the cost for rent and general living continues to increase, salaries are yet to follow suit. This not only makes it difficult to save for a deposit, but it can also be very disheartening. But high loan-to-value mortgages can be seen as a light at the end of the tunnel. By putting less pressure on the need for a large deposit, more people feel confident in getting on the ladder. Government-guaranteed mortgages will be essential in helping this market, which had few options previously.
What does this all mean for the market?
As we continue to exit another national lockdown, confidence in the market continues to build. Although the stamp duty holiday is due to end, the new 95% loan-to-value mortgages will help to ease some of the fall off. The scheme is positive for the market, but it is important to consider all your options. A five percent deposit may seem like a quicker route to becoming a homeowner but remember you will be repaying at a higher rate. So, if you are able to save more money or for longer, it may be a better option in the long run.
How can Home Move Hub help?
If you are looking to benefit from a Government-guaranteed mortgage, Home Move Hub can help you with our online conveyancing and survey solution. You can get a free, online quotation in seconds, plus our dedicated team is available seven days a week to answer any questions you have. Get your quote today and begin your property journey!
