The Help to Buy mortgage guarantee scheme has led to a fivefold increase in the number of 95% mortgage products on offer since its inception three years ago.
Unsurprisingly, given the rise in property prices (especially in the South East) people are being forced to take on the largest possible mortgages in order to be able to afford to buy a house.
The Telegraph reports that when the mortgage guarantee scheme was introduced in October 2013, there were 56 mortgages available for 95% of a property’s value. Research conducted by Moneyfacts shows that the number on offer now stands at 271.
Ironically these mortgages are often not accessible for those in the South and South East, where they are needed the most. First-time-buyers in London had an average mortgage size of 77%, compared to 82% in the North West and 84.5% in Yorkshire.
The mortgage guarantee scheme is due to end this year. However, the equity loan scheme, also known as Help to Buy One, which launched in April 2013, will continue until 2020.