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Take-up of Government's mortgage guarantee scheme dwindles

Take-up of Government's mortgage guarantee scheme dwindles
Shekina Tuahene
Written By:
Shekina Tuahene

There were just 1,784 mortgages completed using the Government’s mortgage guarantee scheme in the last three months of 2023, HM Treasury figures showed.

Since its launch in April 2021 until December 2023, 42,836 mortgages have been completed through the scheme. This represents 1.3% of all residential mortgage completions in the UK over the same time period. 

The initiative was originally due to close at the end of 2023, but was extended in last year’s Autumn Budget and is open to new business until 30 June 2025. 

Some 85% of these purchases made so far have been by first-time buyers. 

The total value of mortgages supported comes to £8.2bn, which have been used to finance properties worth £8.7bn collectively. The value of guarantees through the scheme amounts to £1.2bn. 

Since launching, the number of completions each month has ranged between 546 and 757, but December 2023 saw the lowest number of completions, at 498. 

Used for lower-priced homes 

The average value of a property purchased or remortgaged through the mortgage guarantee scheme to the end of September 2023 was £202,713, compared to the average UK house price of £284,691. 

Some 23% of completions were for homes worth up to £125,000, while 52% of properties had a value between £125,001 and £250,000. 

Just a quarter of completions were against homes worth more than £250,000. 

Terraced houses make up the largest share of homes mortgaged through the scheme, at 35%. This is followed by semi-detached properties, which account for 30% of completions, then flats or maisonettes, which make up 23%. 

Just 7% of homes mortgaged through the scheme were detached, 3% were bungalows and 2% were other. 

Income splits 

Fewer than half of the households that completed a mortgage with the support of the scheme had an income of up to £50,000.

The average household income came to £55,384, and 14% of all completions were from households with an income of more than £80,000. 

Households with an income of between £40,001 and £50,000 made up the largest share of completions, accounting for 21%. 

Less mortgage guarantee scheme use in London and Northern Ireland 

Scotland and the North West and South East regions in England have had the highest share of use for the mortgage guarantee scheme since its launch. 

Some 22% of completions have been in Scotland, compared to the country accounting for just 9% of all UK mortgage completions. 

Around an eighth (12%) of completions have been in the North West region of England, and 11% have been in the South East. 

Completions in London and Northern Ireland make up the smallest shares, at 4% and 3% respectively. 

For Northern Ireland, this was similar to the share of mortgages completed overall, with the nation accounting for 2% of UK completions. 

In Wales, mortgage completions made up 4% of the UK total and 5% of mortgage guarantee scheme completions. 

Some 69% of completions through the scheme were in England, compared to the country making up an 85% share of all UK residential mortgage completions.