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95% Mortgage Guarantee Scheme Launched

May 14th 2021
By: Intercounty
95% Mortgage Guarantee Scheme Launched

At Intercounty, we are here to help buyers and vendors as best we can. We know saving for a deposit is a struggle for many households, but help is available. The 95% mortgage guarantee scheme is now available, backed by the Government, and it might be of interest to local buyers.

The criteria of the scheme is based on:

  • Buyers can purchase property valued up to £600,000 with a 5% deposit

  • The scheme is open to first-time buyers, and existing homeowners

  • The scheme is not limited to new-build property, it can be used on all manner of property

  • The scheme aims to help buyers by incentivising lenders to provide more affordable mortgages to more buyers

As of early May 2021, Rightmove states the following for house prices in Sawbridgeworth;

Properties in Sawbridgeworth had an overall average price of £448,720 over the last year.

The majority of sales in Sawbridgeworth during the last year were semi-detached properties, selling for an average price of £436,145. Detached properties sold for an average of £705,634, with flats fetching £255,299.

Overall, sold prices in Sawbridgeworth over the last year were 12% up on the previous year and 11% up on the 2017 peak of £403,821.”

As you’ll see, the average price of property in Sawbridgeworth is below the threshold of the scheme. Therefore, this is a scheme that might make a difference to local buyers. Also, if it helps more people buy a home, this is positive news for people looking to sell their home in the local area.

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Robert Jenrick, Housing Secretary, comments: "For too many people, no matter how hard they work, homeownership can seem out of reach. One of the biggest divides in our country has been between those who can afford their own home and those who cannot. That’s why we are determined to do everything we can to help hard-working families and prospective first-time buyers get their feet on the housing ladder in an easy and affordable way, to level up this country. The new mortgage guarantee scheme which comes into effect today will give providers the confidence to lend and help families and young people get on the property ladder without the prohibitive burden of a large deposit.”

The Housing Secretary concluded by saying; “Despite the challenges faced over the past year, the government has intervened to protect jobs, support builders and buyers to help keep the housing market healthy. Today’s 95% mortgages launch further strengthens our commitment to build back better from the pandemic. In recent years we’ve reversed the trend and seen a positive increase in owner-occupiers. We’re determined to build on this through the range of flexible ownership options which help ensure homeownership is achievable. We want to match the ambitions of aspiring homeowners up and down the country. Together we can turn ‘Generation Rent’ into ‘Generation Buy’.”

Experts have their say

Tim Bannister, Rightmove’s director of property data, says: “The new mortgage scheme could help some first-time buyers bring their plans forward if they have a lower deposit but are still able to pass the affordability checks, and will be welcomed by those who last year we’re struggling to come up with a 15 or 20% deposit. Although the number of new properties coming to the market is improving, it’s still nowhere near enough to satisfy the buyer demand that is already at record levels, and so more people choosing to trade up will be vital to open up more choice at the start of the property ladder.”

Tim Bannister also said; “The combination of not enough stock and high demand will help underpin prices, and over the past five years asking prices of a typical first-time buyer home have already increased by £23,000 on average, so those who can now afford to buy a home will be trying to make the move quickly in case prices rise further.”

For property enquiries in Sawbridgeworth, please feel free to call us on 01279 600333 or why not email us at sawbridgeworth@intercounty.co.uk. With considerable experience in the local market, and free valuation services, we look forward to helping you move.