Govt confirms new mortgage guarantee scheme

The government has confirmed a new, permanent mortgage guarantee scheme to “open the door to home ownership for more young families and hardworking renters”.

In June, before coming to government, the Labour party pledged to expand and make permanent the Conservatives’ mortgage guarantee scheme, rebranding it “Freedom to Buy.” At the time, it said this move would help 80,000 more young people onto the housing ladder.

The previous administration’s mortgage guarantee scheme, introduced in 2021 to help people access a mortgage with a low deposit, was set to end in June 2025.

Under the initiative, the government has offered lenders the financial guarantees they require to provide 95% mortgages on homes worth up to £600,000, subject to standard affordability checks.

New details on the new scheme, which will replace the existing initiative, will be announced “in due course”.

Alongside this commitment, the government said Emma Reynolds, economic secretary to the Treasury, had written to the Financial Conduct Authority (FCA) following its response to ministers’ call to regulators to explore ways to stimulate growth.

Reynolds wrote that the government supported the FCA’s proposal to review mortgage rules. In January, Nikhil Rathi, FCA’s ceo, …