Mortgage guarantee scheme supports 6,535 mortgages

Mortgage guarantee

Around 84 per cent of mortgage completions through the scheme came from first-time buyers with 5,509 completions

Around 6,535 mortgages have been completed through the government’s mortgage guarantee scheme between April and September 2021, with loans coming to a total value of £1.2bn.

According to the HM Treasury’s latest figures, this represents three per cent of all residential mortgage completions in the UK during this period.

The mortgage guarantee scheme for 2021 opened in April and was available across the UK until the end of December.

The government offered lenders the choice to purchase a guarantee on mortgage loans where borrowers have a deposit of less than 10 per cent. It can be used for new build, existing homes, first-time buyers, home movers and remortgagors subject to eligibility criteria.

The figures show that completions have been steadily growing, going from 51 in May to 760 in June and then ramping up to over a thousand in July and August and nearly 3,000 in September.

The report said the total value of the government guarantee came to £179m, and the total value of properties was around £1.3bn.

Around 84 per cent of mortgage completions through the scheme came from first-time buyers with 5,509 completions.

Take-up of the scheme was mainly from those on lower incomes, with over half using the scheme having a household income up to £50,000. Those with an income of £80,000 or more only made up 21 per cent of completions.

Around 64 per cent of completions through the scheme were in England, but the scheme also proved popular in Scotland with around 27 per cent of completions coming from this region.

Within England, around 12 per cent of completions came from the South East, followed by the North West with 11 per cent and East of England at eight per cent.

The North East and London had the lowest completions at four per cent apiece.

Karen Noye, mortgage expert at Quilter, said the first set of data about the mortgage guarantee scheme was ‘disappointing’ with just 812 mortgage completed between April and June, but she said it was understandable as the scheme had only been active for a few months and some buyers may not have completed.

She said the current figures for the six months from April to September, which showed 6,535 mortgages having been completed under the scheme, still pales in comparison to the number of first-time buyers looking to get a foot on the property ladder.

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