Why has the government introduced the scheme?
Earlier in 2020 the government looked to provide some impetus to the housing market by putting in place a stamp duty tax holiday, giving savings up to £15,000 to some would be home buyers. Whilst this had its desired effect many lenders started to restrict the availability of their mortgage ranges and one sector to suffer the most was that of the higher loan to value mortgage.
Nearly all lenders withdrew these from the market in entirety and although we have seen a good number of 90% LTV options return, 95% loans still remain scarce.
The 95% LTV Mortgage Guarantee Scheme therefore has been introduced with effect from April 2021 to encourage lenders to re-enter this arena.