(Bloomberg) -- The U.K. is set to introduce a mortgage guarantee program to help people get on the property ladder, after the housing market enjoyed a recession-defying surge.
The program will bring back 95% mortgages to help aspiring homeowners who have smaller deposits, the Treasury department said in a statement. Chancellor Rishi Sunak is expected to announce the scheme during Wednesday’s budget.
The much-anticipated budget will be the first look into a post-pandemic economy after Prime Minister Boris Johnson announced his road-map out of lockdown earlier this month.
The U.K.’s housing market has been bolstered by a moratorium on stamp duty charged on property purchases, which saved buyers up to 15,000 pounds ($20,900). That’s due to expire at the end of next month, but there are reports that Sunak could prolong the exemption.
First-time buyers or current homeowners looking to buy a house for up to 600,000 pounds will just need a 5% deposit to secure a mortgage. The government will offer lenders the guarantee they need when the program starts in April.
“Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder,” Prime Minister Boris Johnson said in a statement.
©2021 Bloomberg L.P.
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