
One of the measures announced at the Budget was the introduction of a new Mortgage Guarantee Scheme to help home buyers purchase property. The scheme was officially made available from Monday, 19 April 2021. The new scheme is designed for prospective home buyers who only have a small deposit and are therefore unable to obtain mortgage finance. Under the scheme, lenders will be able to offer new 95% mortgage products.
The scheme is open to first time buyers and home movers across the UK. Home buyers can purchase properties valued at up to £600,000 and both new-build and existing properties are eligible. The scheme will initially run until 31 December 2022. The government has confirmed that the end date for the scheme will be reviewed and may be extended.
The government will provide lenders with the option to purchase a guarantee on the top- slice of the mortgage (over 80%). Lenders will also take a 5% share of net losses above this 80% threshold. This will help to ensure that lenders are not incentivised to originate poor-quality loans. Lenders will also need to pay the government a commercial fee for each mortgage in the scheme. The mortgage guarantee will be valid for up to seven years after the mortgage is originated.
There will be a cap on the size of the government’s contingent liability under the scheme of £3.9 billion although this is not expected to impinge on delivery of the scheme. The scheme is similar to a previous Help to Buy: Mortgage Guarantee Scheme that closed to new applicants on 31 December 2016.
The scheme is available from lenders on high streets across the country, with Lloyds, Santander, Barclays, HSBC and NatWest already launching mortgages under the scheme and Virgin Money following next month.
Commenting on the launch of the scheme, the Chancellor of the Exchequer, Rishi Sunak said:
‘Every new homeowner and home mover supports jobs right across the housing sector but saving for a big enough deposit can be hard, especially for first time buyers.
By giving lenders the option of a government guarantee on 95% mortgages, many more products will become available, boosting the sector, creating new jobs and helping people achieve their dream of owning their own home.’
The health and care sector tax planning in the UK is becoming more critical as we move through 2025 and...
Electronic invoicing (e-invoicing) is moving from a digital option to a legal requirement in the UK. Following extensive consultation with...
The autumn Budget 2025 quietly introduced a powerful incentive for whistleblowers. From 26 November 2025, anyone who provides HM Revenue...
Rachel Reeves’ Autumn Budget on 26 November 2025 confirmed a major tax rise across the UK. As part of Rachel...
The 2025 Autumn Budget confirmed that the UK income tax threshold freeze will remain unchanged until the 2030–31 tax year....
The Chancellor’s 2025 Autumn Budget confirmed a major change for owners of higher value homes in England. The government introduced...
As online education expands, UK-based Learning Management System (LMS) providers are subject to increasingly detailed VAT obligations. From automated modules...
The UK’s digital learning sector is growing fast, and Learning Management System (LMS) providers are now firmly on HMRC’s radar....
In today’s competitive edtech environment, Learning Management System (LMS) providers must work harder than ever to attract and retain high‑performing...
The Autumn Budget 2025 introduces major tax, investment and regulatory measures that will impact businesses across the UK. The government...