Just 15% of working age people believe that the government’s mortgage guarantee scheme could apply to them, a new study has revealed.
A poll carried out among 1,222 UK adults aged between 18 and 54, by price comparison site NerdWallet, also found that only one in five (22%) people under the age of 25 believe that the scheme could be relevant to them.
The government’s mortgage guarantee scheme, announced in the 2021 Spring Budget, aims to helps first-time buyers and home movers to secure a mortgage with a 5% deposit. The scheme applies to homes valued at up to £600,000, with the government promising to cover a portion of the losses a lender might incur in the event of a borrower failing to repay the mortgage.
Many lenders, including major high street banks, are currently offering mortgages to eligible buyers at 95% LTV.
However, NerdWallet suggested its research has highlighted some doubt as to the number of people who might choose to take advantage of the scheme.
“While government-backed 95% mortgages have been welcomed by many, our research suggests that its benefits may not yet be widely known among potential buyers,” commented NerdWallet senior mortgages expert, Richard Eagling.
“Although not right for everyone, the scheme is a significant development for those who would otherwise be unable to put down a larger mortgage deposit – meaning that many who are unaware of it could miss out on getting a foothold on the property ladder.”
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