Details of the permanent successor to the mortgage guarantee scheme are set to be announced next Tuesday by Chancellor Rachel Reeves.
Dubbed ‘Freedom to Buy’, the permanent successor to the previous scheme was announced in the government’s Spending Review last month.
The mortgage guarantee scheme previously provided a government guarantee on 95% LTV loans between 80% and 95%.
The new version will see lenders pay a fee to the Treasury to provide guarantees against potential losses on 95% loan-to-value mortgages in the event of repossession.
The Chancellor is expected to make the announcement at the upcoming Mansion House speech on July 15, the Financial Times said.
Guy Gittins, chief executive at Foxtons, said: “Government support for first-time buyers is always welcome – but more needs to be done.
“The end of the stamp duty holiday has shown that high stamp duty rates are a barrier for anyone trying to get on, or move up, or even downsize on the property ladder.
“We urge the government to rethink current stamp duty thresholds. A meaningful review could make a real difference for hardworking people across the UK striving to find a home that fits their needs.”
The mortgage guarantee scheme was originally one of two Help to Buy lending schemes in 2013. It was relaunched in 2021 as the mortgage guarantee scheme during the covid-19 pandemic, but it expired at the end of last month.