The chancellor Jeremy Hunt is expected to extend the mortgage guarantee scheme for another year to help those struggling to cope with increasing mortgage rates, as part of the Autumn Statement next month.
It is understood the Treasury is looking at making the scheme, which helps people take out a mortgage with a 5% deposit, available for a further 12 months.
The mortgage guarantee scheme, first introduced in March 2021 by the then chancellor Rishi Sunak, was designed to encourage lenders to offer mortgages to borrowers with a smaller deposit. But mortgage rates have since soared, while many people struggle with the higher cost of living.
The Sunday Times reports that the Treasury is also examining options for a new kind of ISA encouraging people to save for a first home.
Other ISAs, such has Help to Buy, which rolled-out in 2015 under former chancellor George Osborne and ended on 31 March, were criticised as property prices rose higher than the scheme’s limit.
Under its rules, buyers were awarded a 25% bonus from the government on homes worth up to £250,000 in England and £450,000 in London.
Hunt is also considering increasing the £450,00 upper limit on house purchases funded by a Lifetime ISA, where government adds 25% to savings aimed at building a deposit, although no decision has yet been made.
The chancellor will announce the Autumn Statement on 22 November.
