Thu 01 Apr 2021
What The Government’s 95% Mortgage Scheme Means For Buyers
Earlier this month, the Chancellor Rishi Sunak announced the Spring 2021 Budget, with good news for the UK housing market.
One scheme which was introduced was the government guaranteed 95% mortgages.
This scheme will allow buyers to purchase a property with a 5% deposit, half of the current standard requirement of at least 10%. In return, the government promised lenders that it will cover any risks, such as if the homebuyers fall behind on their mortgage payments or if house prices drop and the property falls into negative equity.
The aim is to support home ownership and make mortgages more accessible for buyers struggling to meet strict criteria from lenders, especially those who are first time buyers. Prime Minister, Boris Johnson, declared he wants to ‘turn Generation Rent into Generation Buy’.
The scheme will solely be available to buyers of properties costing up to £600,000, excluding second homes or buy-to-let properties. Big lenders such as HSBC, Natwest, Barclays and Santander have committed to provide the mortgages, however interest rates have not yet been released.The mortgages will be available from April 2021, until December 21 2022.
The initiative is a fantastic chance for thousands of first-time buyers who are eager to get onto the property ladder, and make the leap from a lifetime of renting to owning their own property. With the stamp duty holiday extension and the 95% mortgages, it really is the best time to make the move.
If you're looking to find a new home and want to make the most of the 95% mortgage scheme, view our selection of properties under £600k or contact us on 01788 551111 to speak to one of our expert agents.