Government expects new initiative to support thousands more homebuyers
The majority of mortgage completions supported by the government’s Mortgage Guarantee Scheme were made by first-time buyers (FTBs), who accounted for 86% of all completions between April 2021 and March 2025, according to data released by HM Treasury on Wednesday.
The scheme, which closed to new applications at the end of June 2025, was designed to help those with smaller deposits to access the property market.
In total, 56,389 mortgages were completed with support from the scheme during its operation, representing 1.4% of all residential mortgage completions in the UK for the period. The initiative allowed lenders to obtain a government guarantee on loans where the borrower’s deposit was less than 10%, provided the property value did not exceed £600,000 and the mortgage was not for buy-to-let or a second home.
As the original scheme concluded, the UK government introduced a permanent Mortgage Guarantee Scheme in July, rebranded as Freedom to Buy. The new programme aims to help homebuyers secure a property with deposits as low as 5%. Under Freedom to Buy, lenders will receive a government-backed guarantee on 91–95% loan-to-value (LTV) mortgages, insuring them against a portion of potential losses. Officials expect this to encourage more lenders to offer high LTV products, supporting up to 36,000 additional mortgages for first-time buyers in the first year.
During the previous scheme’s operation, the government provided £1.7 billion in guarantees, backing £11.5 billion in mortgage lending. Properties purchased or remortgaged under the scheme had a combined value of £12.2 billion.
The mean property value for completions through the scheme was £215,467, below the UK average house price of £271,000. Most completions were for homes valued at £250,000 or less, with terraced and semi-detached houses making up the largest share at 35% and 30% respectively.
HM Treasury statistics also indicated that 42% of households using the scheme had incomes up to £50,000, with a median household income of £53,711. Households earning above £80,000 represented 18% of completions.
Regionally, 71% of completions took place in England, followed by Scotland at 21%, Wales at 5%, and Northern Ireland at 3%. Scotland’s share of completions was notably higher than its proportion of the overall UK mortgage market.
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