The scheme was established in April 2021 to cover lenders from losses which may be incurred through 95 per cent loan to value (LTV) lending with a government guarantee. 

The value of the government guarantee now comes to £1bn and accounts for mortgages which are valued at £7bn. The value of properties purchased through the scheme currently stands at £7.4bn. 

In the three months to March, there were 1,938 completions under the scheme, down from 5,110 in Q4 2022.  

The value of the mortgages completed in Q1 came to £417m and these loans were used to purchase properties with a collective value of £441m. In this period, the value of the government guarantee came to £60m. 

 

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Completions lower than average property price 

Since the launch of the scheme, properties with a value of up to £125,000 have made up a quarter of completions while properties worth between £150,001 to £200,000 accounted for 24 per cent of activity. 

The majority of homes bought through the scheme are lower than the current average house price of £285,009. Some 63 per cent of homes are worth £200,000 or less while just 23 per cent of completions are against properties with a value of £250,000 or higher. 

Just one per cent of properties are worth between £500,000 and £600,000. 

The average value of a home purchased under the scheme is £197,472. 

Terraced homes were the most popular type of property to be purchased with the mortgage guarantee scheme and made up 35 per cent of completions accounting for 13,155 transactions. This was followed by semi-detached properties which held a 29 per cent share of completions, then flats and maisonettes which represented 24 per cent of completions. 

More than half of the households who make use of the mortgage guarantee scheme have an income of £50,000 or lower. This compares to 13 per cent of borrowers which a household income of £80,000 and above. 

The average household income for borrowers using the scheme is £53,518. 

The majority, 86 per cent, of people using the scheme have been first-time buyers. 

 

Regional demand 

The mortgage guarantee scheme appears to be popular with buyers in Scotland as since its launch, 23 per cent of completions have taken place there. This compares to Scotland making up nine per cent of all UK mortgage completions. 

In Wales and Northern Ireland, the take up of the scheme seems broadly in line with wider market activity. 

Wales has accounted for four per cent of all mortgage transactions since April 2021, while five per cent have been completed under the scheme. In Northern Ireland, this is a two per cent to three per cent split. 

Some 69 per cent of completions in England have been done through the mortgage guarantee scheme, compared to the country holding an 86 per cent share of overall UK activity.