Speculation is mounting that Chancellor Jeremy Hunt could announce an extension of the mortgage guarantee scheme in his upcoming Autumn Statement, according to reports.
Set to be delivered on November 22nd, the statement may include a decision to prolong the scheme, which was initially extended for 12 months last year and is due to expire in December.
The mortgage guarantee scheme allows first-time buyers to secure a mortgage with just a 5% deposit, with the Government promising to cover certain costs if the lender loses money—for instance, if the property is repossessed.
According to a report by The Sunday Times, the Government is considering extending the scheme for another year, although the BBC reports that no final decision has been made.
Alongside the mortgage guarantee scheme, the Treasury is reportedly exploring other avenues to assist first-time buyers.
One such proposal is the introduction of a new ISA product aimed at individuals saving to purchase a home.
Presently, savers can claim a 25% government bonus through Lifetime and Help to Buy ISAs, aiding them in accumulating the funds needed for a deposit.
The Sunday Times further reports that Chancellor Hunt may consider raising the current £450,000 upper limit for these ISAs to better reflect the inflation in house prices.
Ben Thompson, seputy CEO, Mortgage Advice Bureau, supports such a move. He said: “It’s been a really challenging time for first-time buyers to get the keys in their hands.
“Economic volatility has seen potential buyers battle high inflation, pushing prices up and limiting the amount they can save. Meanwhile, the higher interest rate environment has lowered the amount they can borrow, meaning bigger deposits are needed.
“The Government is right to look at support for those taking their first steps on the property market in the upcoming Autumn Statement, but extending the mortgage guarantee scheme is just one possible route.
“Other options on the table are a review of ISA products to support saving, or reforms to the existing products that savers are utilising.
“For those looking at getting on the property ladder, it’s best to engage with a mortgage adviser as early as possible to get expert guidance on your potential options when it comes to getting a mortgage.”
