Chancellor Rachel Reeves is expected to unveil a “Freedom to Buy” mortgage guarantee scheme next week, it has been widely reported.
Multiple outlets, including The Financial Times, report that Chancellor Rachel Reeves will officially launch the “Freedom to Buy” mortgage guarantee scheme in her upcoming Mansion House speech on 15 July 2025
The permanent government-backed mortgage guarantee scheme, a manifesto commitment of the Labour party, will allow lenders to offer mortgages at 95% loan-to-value (LTV), backed by government guarantees in case of repossession, with a view supporting first-time buyers onto the property ladder.
It is understood that the guarantee ceiling is £3.2bn in contingent liability, with fees paid by lenders intended to offset taxpayer risk.
The scheme is rebranded from a similar temporary Covid-era programme introduced by the Conservative government during the pandemic to preserve higher loan to value (LTV) lending.
“The issue is not the unavailability of 95% loan to value mortgages. The issue is that an increasing number of buyers do not have a big enough deposit [with a 4.5x loan-to-income loan]. In order to help first-time buyers the government is going need a bigger policy, in our view.”
Guy Gittins, CEO at Foxtons, welcomes government support for first-time buyers – but he insists that more needs to be done.
“The end of the stamp duty holiday has shown that high stamp duty rates are a barrier for anyone trying to get on, or move up, or even downsize on the property ladder,” he said. “We urge the government to rethink current stamp duty thresholds. A meaningful review could make a real difference for hardworking people across the UK striving to find a home that fits their needs.”
Daily news email from EYE
Enter your email below to receive the latest news each morning direct to your inbox.
