Has the mortgage guarantee scheme helped?

In April 2021, the Conservative government launched its mortgage guarantee scheme ‘to support a new generation in realising the dream of home ownership’ ². Between 2021-2023, over 1.13 million mortgages were taken out by homeowners aged 18-30¹. However, only 44,368 mortgages were completed with the support of the mortgage guarantee scheme – 86% of which were FTBs.

A recent downward trend

Until 2021, the number of mortgages secured by 18–30-year-olds each year was on a steady rise, increasing from 252,558 in 2014 to 401,665. However, since 2021 (when the Stamp Duty holiday ended), mortgages secured by young people decreased by 13% to 350,092 in 2023. This suggests that the mortgage guarantee scheme did not support FTBs to the extent that had been hoped for.

What’s in store?

In its manifesto, the Labour Party pledged to make the current mortgage guarantee scheme permanent, under the name of ‘Freedom to Buy’. With higher mortgage rates predicted to become the ‘new normal’³, many will be waiting to hear the details of the new scheme and any additional support provided to boost its effectiveness.

Your home may be repossessed if you do not keep up repayments on your mortgage 

^* FCA, 2024

² Gov.uk, 2021

³  Lloyds Banking Group, 2024