Rishi Sunak has announced his plan to help first time buyers with 5% mortgage deposits get on the property ladder.
The scheme is due to start in April and will help the tens of thousands of young buyers to get on the property ladder.
The coronavirus pandemic has meant there are now few low-deposit mortgages available, with just eight on the market in January.
They are often seen as riskier by banks as they are more vulnerable to negative changes in property prices – meaning people hold more debt than their home is worth.
Under the scheme, the government will offer to take on some of this risk.
The government is to become guarantor for part of the loans which will be for properties up to £600,000.
“I want generation rent to become generation buy and these 95 per cent mortgage guarantees help to deliver this promise,” said Boris Johnson over the weekend.
“Young people shouldn’t feel excluded from owning their own home and now it will be easier than ever to get on to the property ladder.”
Some 3,000 buyers are expected to be offered the loans every month.
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