HM Treasury has announced the launch of a permanent mortgage guarantee scheme, aimed at supporting first-time buyers and home movers across the UK. The scheme enables access to 91–95% loan-to-value mortgages, allowing buyers to purchase a home with deposits as low as 5%. Effective from July, the scheme provides participating lenders with a government-backed guarantee, insuring them against a portion of potential losses on those qualifying mortgages. The scheme rules, published on the same day, set out the eligibility criteria, lender obligations and terms under which the government guarantee applies. The announcement accords with other significant mortgage market developments as referred to in the Chancellor′s Mansion House speech, including the Financial Policy Committee′s announcement regarding the loan-to-income limit on mortgage lending which the UK regulators are implementing.
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