Launched in April 2021, the government’s mortgage guarantee scheme aimed to help a new generation achieve homeownership. But has it truly made an impact?
The Mortgage Guarantee Scheme’s Impact
Between 2021 and 2023, over 1.13 million mortgages were secured by homeowners aged 18–30. However, only 44,368 mortgages were supported through the mortgage guarantee scheme, with 86% of these going to first-time buyers (FTBs).
While the scheme provided some assistance, the numbers suggest it didn’t meet the ambitious goals set for boosting first-time homeownership.
A Declining Trend
Before 2021, the number of young homeowners securing mortgages had been steadily rising—from 252,558 in 2014 to 401,665 in 2020. However, since the end of the Stamp Duty holiday, this number has dropped by 13%, reaching 350,092 in 2023.
This decline indicates that the mortgage guarantee scheme did not fully offset the challenges posed by rising house prices and higher borrowing costs.
Looking Ahead
The Labour Party pledged to make the scheme permanent under the banner of “Freedom to Buy.” With higher mortgage rates expected to be the new norm, many will be keen to see how this revised scheme might address affordability challenges and provide more robust support for first-time buyers.
At Pioneer Mortgages, we’re here to help you navigate these changes and find the best solutions for your unique circumstances. Get in touch for expert advice today.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Sources: FCA, 2024 Gov.uk, 2021 Lloyds Banking Group, 2024
