Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Government completed 12,388 mortgages through 95% LTV scheme

LTV scheme

The quarterly statistics show that 12,388 mortgage completions from the scheme launch on 19 April to the end of December 2021, represented 5% of all residential mortgage completions in UK

The UK government has revealed that 12,388 mortgages had been completed through its 95% loan to value (LTV) scheme at the end of 2021.

The scheme, which was announced in March last year, provides buyers with the option to put down a 5% deposit on a home with a value of up to £600,000 ($732,457), to address the problem of higher-LTV mortgages disappearing from the market.

The latest quarterly statistics show that 12,388 mortgage completions from the scheme launch on 19 April to the end of December 2021, represented 5% of all residential mortgage completions in the UK.

While the scheme had a slow take-up in the first six months, completions increased in the final three months of the year with 5,863 from October to the end of December.

Of the total completions, 86% were purchased by first-time buyers.

The report found that the corresponding value of the guarantees was £326m ($397m) while the overall value of loans supported by the scheme was £2.2bn ($2.69bn). The mortgages were used to finance properties worth £2.35bn ($2.87bn) in total.

The mean value of a property purchased or remortgaged through the mortgage guarantee scheme to the end of December 2021 was £189,804 ($231,705), compared to an average UK house price of £274,712 ($335,357).

Data found that 28% of all mortgage completions through the scheme to date were on properties in the lowest value band, and 66% were on properties worth £200,000 ($244,152) or less.

Only 21% of mortgage completions were on properties valued at £250,000 ($305,190) and above.

The majority of mortgage completions through the scheme were on terraced houses, making up 35% of total completions.

Flats or maisonettes made up 28% of completions, while completions for detached houses and bungalows equated to 7% and 3% of the total respectively.

Commenting on the latest data, Quilter mortgage expert Karen Noye says: First time buyers are facing a disastrous raft of issues at the moment having suffered from ever-increasing house prices, inflation eating away at their deposits, a rise in the cost of living disrupting their ability to save and now successive interest rate hikes.

Noye says: It is therefore somewhat surprising to see that only 12,388 mortgages have been completed with the help of the Mortgage Guarantee Scheme, which should be acting as a lifeline for those struggling to get on the housing ladder.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.