Mortgage scheme helping first-time buyers get on the ladder to end within weeks

The mortgage guarantee scheme, popular among first time buyers, enables purchasers to get a home with just a 5% deposit.

Available from high street lenders, the scheme, first launched in April 2021, is now set to come to an end on June 30.

The scheme can be used to buy any type of home, meaning buyers are not restricted to new build properties or shared ownership.

When it comes to restrictions, the only limits are an upper purchase price cap of £600,000.

Providing buyers with a guarantee, the scheme sees the Government cover some of a lender's losses if a borrower can't afford mortgage repayments in the case of repossession.

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Scheduled to end on June 30, the Treasury has spoken of a replacement scheme since February, however, at present no plans for a replacement scheme have been confirmed.

It comes as new mortgage rules could see average house prices rise by £19,000 and help first-time buyers with lower deposits, according to UK estate agents Savills.

Adjustments to stress testing practices could see property prices spike by between 5% and 7.5% over the next five years, Savills has said last week.

The estate agent also predicts that the average cost of a deposit required by a first-time buyer could drop from £58,000 to £45,000 over the same period.

Lucian Cook, a researcher at Savills, said: “Change would not be immediate, with the impact on house prices and transactions likely to take place over a period of five years.

“But in the medium to long term, the market would feel the knock-on effect of a widening pool of buyers.