GOVERNMENT EXTENDS ‘GENERATION BUY’ MORTGAGE GUARANTEE – THE GUARDIAN

Scheme to help first-time buyers on to property ladder has been used by more than 24,000 households across UK

The government is extending the mortgage guarantee scheme, which helps buyers with small deposits get on the property ladder as higher borrowing costs threaten to put the brakes on the UK housing market in 2023.

The scheme, launched in April 2021, was billed as a way of helping turn generation rent into “generation buy”. It had been due to finish this month but the government said it would now run until the end of next year. The Treasury said the scheme had helped more than 24,000 households across the UK, with first-time buyers behind 85% of the transactions.

The initiative supports banks and building societies that offer 95% loans, meaning buyers only have to raise 5% themselves, on a house worth up to £600,000. These high loan-to-value (LTV) products are predominantly used by first-time buyers who, given the breakneck growth in house prices seen in recent years, struggle to raise a deposit.

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