As the Autumn statement approached there had been a flurry of discussion about the potential impact it could have on the UK property market. The significance of the Autumn Statement lies in its role as a progress report on the government’s economic strategies.
The government’s intentions for its mortgage guarantee scheme have been subject to significant speculation.
The scheme offers prospective buyers the opportunity to secure a mortgage that covers 95% of the loan to value (LTV) on properties valued up to £600,000, requiring only a 5% deposit from the buyer.
To illustrate, a prospective homeowner interested in a property priced at £100,000 would need to put down just £5,000 as a deposit.
Introduced in the 2021 budget, the mortgage guarantee scheme has been instrumental in alleviating the initial financial strain of securing a mortgage.
The scheme has been particularly well-received by first-time buyers, who make up approximately 86% of those taking advantage of the scheme.
Initially set to conclude at the end of December 2023 after an extension in late 2022, the scheme’s future has been a source of uncertainty for many aspiring property owners.
Autumn Statement Unveils the Future of the Mortgage Guarantee Scheme
The weeks long debate was put to rest on November 22nd when Jeremy Hunt delivered the Autumn statement to the House of Commons.
The statement confirmed that the government plans to prolong the mortgage guarantee scheme by a further 18 months.
This extension allows prospective first-time buyers to benefit from the scheme until the end of June 2025.
The news has been warmly received by first-time buyers across the UK, as the mortgage guarantee scheme lessens the initial financial hurdle they face when entering the property market.
Managing Director of Embrace Financial Services Paul Nurding had to say:
The scheme’s extension will bring relief to those who have been diligently saving for their first mortgage over the past few years.
Given that the Office for Budget Responsibility (OBR) predicts a potential 4.7% decrease in house prices in 2024, so now could be an opportune time to explore your home ownership options.
If you’re considering selling, it could be beneficial to list your property before the year ends. Conversely, if you’re in the market to buy, you might want to commence your property search now to prepare for the upcoming year.
Are you thinking about what your options are but don’t know where to start? Whether you’re looking to buy, sell, or just want some advice, get in touch with your local branch experts today.
Reeds Rains E-marketing Executive
