The scheme was introduced in April 2021 to enable buyers with a 5% deposit either get onto or move up the property ladder. It was due to finish at the end of this year but will now run until June 2025.
Under the scheme, lenders can purchase a guarantee on any loans where only a small deposit is put down. If the homebuyer can’t keep up with their mortgage repayments and the property needs to be repossessed, the guarantee will provide lenders with protection against losses.
The mortgage guarantee scheme can be used by first-time buyers, home movers and those remortgaging for mortgages on both new and existing homes up to a value of £600,000. You can find out more about how the scheme works, and about other government schemes to help those with small deposits, in our guide Government schemes for first time buyers.
Permitted Development Rights to be expandedThe Chancellor also announced some changes to housing. These included a consultation on the expansion of Permitted Development Rights to enable someone to create two homes within one house, with the aim of increasing the supply of places to live.
This will only be allowed, however, if the external appearance of the property remains unaltered, the Chancellor said. The change will be consulted on early next year with a view for it to be introduced later in 2024.
The government is also providing £3 million for a range of measures to improve the home buying and selling process. However, no details have been given yet about what these will be, or how they’ll be implemented, other than they will include pilots to develop property tech products and to digitise local council property data.
No changes to Stamp Duty rates were announced in the Autumn Statement, nor was there anything about Lifetime ISAs for first-time buyers, despite plenty of speculation that both might be reformed.
This makes it more important than ever for homebuyers and owners to look at ways they can keep costs to a minimum, for example by making sure they are on the best possible mortgage rate. Seek professional advice if you need help working out the most cost-effective options for you based on your individual circumstances.