Mortgage scheme announced in the Chancellor's budget for homebuyers with lower deposits

The Chancellor has announced a new low-deposit mortgage guarantee scheme in the Budget today.

Under the scheme, which is not restricted to first-time buyers or new-build homes, the government will provide a guarantee to lenders to encourage them to offer 95% loan-to-value (LTV) mortgages. There will be a £600,000 price cap.

Hina Bhudia, Partner here at Knight Frank Finance, commented, “Purchasers at higher LTVs have had a tough year in the mortgage market, so any help is welcome. However, banks have demonstrated a reluctance to lend in this market during the past twelve months, partly due to the sheer volume of business at lower LTVs and partly due to concerns over the outlook for jobs. Though that outlook is improving, the success of the scheme will depend on how many lenders take it up, on top of those announced so far, and what pricing they adopt. The government will be hoping the guarantee will significantly stimulate appetite to lend in that space.”

If you want to find out more about the scheme or discuss your own mortgage requirements for this year, please get in touch. We're here to help.