The UK government has announced that it will extend the mortgage guarantee scheme for another year to assist those struggling with the rising cost of housing. The Chancellor Jeremy Hunt is expected to make the announcement as part of the Autumn Statement on 22 November.
The scheme was introduced in March 2021 by the former Chancellor Rishi Sunak, to encourage lenders to provide mortgages to borrowers with a smaller deposit. However, with mortgage rates increasing and many people struggling with the higher cost of living, the scheme has been a crucial support mechanism for homeowners across Herefordshire.
The Treasury is looking at potentially extending the scheme for another 12 months, as well as exploring new ISAs aimed at encouraging people to save for their first home. This new kind of ISA could follow the footsteps of the Help to Buy ISA, which was criticised for being insufficient as property prices rose higher than the scheme's limit.
The Chancellor is also contemplating raising the upper limit on house purchases funded by a Lifetime ISA, which helps to build a deposit by adding 25% to savings. However, no decision has been made on this yet.