The government will consult with the mortgage industry on making the mortgage guarantee scheme permanent, the Autumn Budget document shows.
The scheme was first brought to market as one of the two Help to Buy mortgage lending schemes in 2013, with the remit of boosting the availability of mortgages for people with a 5% deposit.
The mortgage guarantee scheme was relaunched in 2021 and is currently scheduled to run until the end of June 2025.
It works by having the lender recoup most of their losses from the government if the buyer fails to keep up with payments and the property gets repossessed.
The document says: “The government will engage with industry over the coming months on the mortgage guarantee scheme (MGS) to develop plans to make MGS permanently available to support lending at 95% loan to value.
“A permanent scheme will end the stop-start availability of the scheme, and give lenders confidence throughout the cycle, while making it easier for first-time buyers to realise the dream of home ownership.
“The government intends to announce further details of the scheme in Phase 2 of the Spending Review.”
Lee Williams, national sales manager, Saffron for Intermediaries, said: “It is… encouraging to hear that the government will debate making the mortgage guarantee scheme a permanent fixture with industry in the coming months, which would provide much-needed long-term support for borrowers and stimulus for lenders.”
