London Daily

Focus on the big picture.
Thursday, Sep 18, 2025

Budget 2021: Mortgage guarantee to help buyers with 5% deposit

Budget 2021: Mortgage guarantee to help buyers with 5% deposit

A mortgage guarantee scheme to help people with small deposits get on the property ladder is set to be announced at next week's Budget.

The government will offer incentives to lenders, bringing back 95% mortgages which have "virtually disappeared" during the pandemic, the Treasury says.

Chancellor Rishi Sunak says public finances are facing a "challenge" from the pandemic's impact on the economy.

The government has borrowed £271bn this financial year - up £222bn on 2019-20.

This has pushed the national debt to £2.13 trillion.

Explaining the government's economic response to the pandemic, Mr Sunak told the Financial Times: "We went big, we went early, but there is more to come and there will be more to come in the Budget. But there is a challenge [in the public finances] and I want to level with people about the challenge."

He added: "I will do whatever it takes to protect the British people through this crisis and I remain committed to that."

Former Conservative chancellor Lord Clarke called for Mr Sunak to raise taxes in order to bring the UK's finances under control, and warned "if we don't get it under control before inflation comes back then we will face a financial crisis".

The question of tax rises is one the chancellor will need to address when he unveils his Budget in a Commons speech on Wednesday.

In the run-up to the 2019 election, the Conservatives promised not to increase income tax, National Insurance Contributions or VAT - but Mr Sunak could argue circumstances have changed.

Carlisle MP John Stevenson, of the Conservative Northern Research Group, said it was "too early" for tax rises, saying UK still had a few months of the pandemic to get through and he wanted to see continuing support.

But Lord Clarke said the pandemic had been "unfair financially" on "the poor, the young, the low-paid, the vulnerable" and suggested making people who continue in full-time work after the age of 65 pay the same taxes as younger people.

Labour has criticised the government for a "stop, start" approach to support measures during the pandemic. Shadow chancellor Anneliese Dodds told the Times her party did not support an "immediate" increase in corporation tax but would welcome longer-term rises and said she wanted a "more progressive tax system".

The chancellor is also expected to announce an £126m scheme for traineeships in England.

It will include a new "flexi-job" apprenticeship, enabling apprentices to work with different employers in one sector. With unemployment at its highest level for almost five years, Mr Sunak said this was "vital" support for getting people back into work.


Mortgage providers will only lend to those with a regular income, irrespective of any government incentive.

But young adults' finances, and their employment prospects, have been hit hard by this pandemic. It was the same in the financial crisis of a decade ago.

That is why jobs will be central to this Budget - both protecting them now and creating them in the future to aid an economic recovery.

While the chancellor may be able to borrow fairly cheaply now to pay for that support, the prospect of future tax rises to foot the bill will no doubt be addressed too.

Covid has led everyone to face the realities of home, work, and working from home. On Wednesday, many will be looking to Mr Sunak to save their jobs and keep a roof over their heads - whether they own it, or not.

The new mortgage scheme is not restricted to first-time buyers or new-build homes, but there will be a £600,000 limit.

The coronavirus pandemic has meant there are now few low-deposit mortgages available, the Treasury said, with just eight on the market in January.

They are often seen as riskier by banks as they are more vulnerable to negative changes in property prices - meaning people hold more debt than their home is worth.

Under the scheme, which will launch across the UK in April, the government will offer to take on some of this risk.


It is based on the Help to Buy mortgage guarantee scheme, which closed to new loans at the end of 2016, a policy the Treasury said "reinvigorated the market for high loan-to-value lending after the 2008 financial crisis".

But housing charity Shelter said that scheme increased house prices by 1.4%.

Shadow housing secretary Thangam Debbonaire also raised concerns, saying young people needed "genuinely affordable" new houses to be built and did not want to go "back to the days of sky-high mortgages".

The new scheme could coincide with the expected end of a stamp duty holiday in England and Northern Ireland on 31 March - though this may yet be extended.

Next week's announcement is also expected to include a new £100m taskforce to crack down on fraudsters who have exploited support schemes, such as furlough.

Tax officials have opened about 10,000 inquiries into suspected fraudulent activity, the government said.

Newsletter

Related Articles

0:00
0:00
Close
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
×