Growth boost to support more first time buyers
Source: gov.uk (2025-02-13)

The government commits to a new, permanent, comprehensive mortgage guarantee scheme to increase homeownership.

Further plans to modernise home buying have been unveiled this week, helping more people to realise their ambitions of owning their own home as part of the government’s Plan for Change.

The government has committed to launching a new, permanent, comprehensive mortgage guarantee scheme that will open the door to homeownership for more young families and hardworking renters.

Alongside this the Economic Secretary to the Treasury has written to the Financial Conduct Authority (FCA) following their response to the government’s call for regulators to support growth, setting out the government’s support for their proposal to review mortgage rules. The government has made clear it wants the FCA’s review to be as ambitious and rapid as possible to help as many people as possible to achieve the dream of owning a place of their own.

It follows an announcement last week that the government is streamlining and digitising the process for buying and selling homes (https://www.gov.uk/government/news/thousands-to-benefit-from-the-security-of-a-safe-home) to help homebuyers save time and money, and reducing the number of house sales that fall through. Fall throughs impact one in three transactions and cost people around £400million a year in total and currently there are delays of almost five months in the system.

Millions of hardworking people have been locked out of home ownership – the number of first-time buyers fell to a 10 year low in 2023 and today’s under 30s are less than half as likely to be home owners than those at the same age in 1990.

The government’s Plan for Change has clear ambitions for delivering 1.5 million more homes and driving growth – cutting unnecessary red tape in order to be on the side of builders and working people who want to get on the property ladder.

City Minister Emma Reynolds said:

“For too long politicians have ducked and dodged the decisions needed to support homeownership.

“Simplifying responsible lending rules and putting in place a permanent mortgage guarantee scheme shows our commitment to making the dream of owning a home a reality. I will work closely with regulators and industry to get this done quickly and in a way that supports as many people as possible.”

Housing Minister Matthew Pennycook said:

“The affordability challenges facing first-time buyers mean that we now have a generation locked out of homeownership . This government is determined to change that, ensuring that young families and hardworking renters can buy a home of their own.”

New details on the new Mortgage Guarantee Scheme will be announced in due course and will replace the existing Mortgage Guarantee Scheme, which was due to expire this year. By making the Mortgage Guarantee Scheme permanent and comprehensive, banks and building societies will have long-term confidence to continue offering low-deposit mortgages.

Many working people continue to find it extremely difficult to secure a deposit, meaning for too many the dream of home ownership has depended on access to the ‘Bank of Mum and Dad’, leaving those without that option often trapped in a cycle of renting without a way out.

This commitment to a new Mortgage Guarantee Scheme means first-time buyers, including young families, will be able to take that crucial first step onto the property ladder, with only a small deposit, tackling one of the biggest barriers to homeownership and giving them the stability they need to plan for the future.