The policy, according to Kier Starmer, would be an extended, permanent version of the Mortgage Guarantee Scheme (which is currently due to expire in June 2025 and would incentivise lenders to offer high loan-to-value mortgages by acting as a guarantor for prospective first-time buyers who cannot afford a big deposit.
Labour has argued that because the current Mortgage Guarantee Scheme is only temporary, it restricts the number of 95% mortgages on the market and that constant uncertainty over whether the scheme would be renewed has caused lenders to hold back on fully integrating high-LTV mortgages into their product ranges, with buyers left unable to factor it into their home-buying plans.
By making the scheme permanent, (and rebranding it as 'Freedom to Buy'), Labour hopes to boost the low-deposit mortgage market.
However, as with the King's Speech, there was no mention of it today and many are left wondering when we will find out more.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “We were not expecting to see Help to Buy make a comeback but would have thought the Government might have come up with something to stimulate the housing market and assist first-time buyers but perhaps they are more focused on the social sector.
“Hopefully, so much of this Budget was leaked in advance that there is nothing to spook the markets."
Simon Gerrard, Managing Director of Martyn Gerrard Estate Agents and Past President of the National Association of Estate Agents (Propertymark), said: “We already knew that the government would be reducing Right to Buy discounts, but it is frustrating to see a total lack of support for people hoping to realise their dreams of home ownership in the form of Help to Buy, or any similar support schemes. The government could be doing significantly more to support people in buying a home, but this doesn’t appear to be part of its plans whatsoever."
Tom Pike, Director of Planning at Lanpro said: "With the government ruling out a return of Help to Buy, shared ownership failing to meet demand and First Homes failing to scratch the surface of the problem, we clearly need a new mechanism to help people onto the property ladder and it is very disappointing that this was largely overlooked in today’s Budget."
