House buyers ‘to be given 95% mortgages’ as part of new scheme in Budget

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A new mortgage scheme to help buyers with small deposits get on the property ladder is set to be announced next week, Chancellor Rishi Sunak said.

The government will offer incentives to lenders who offer Brits 95% mortgages on buying their own home.

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

The Treasury said the initiative will be based on the Help to Buy mortgage guarantee scheme, which closed to new loans at the end of 2016.

Under the scheme, the government is willing to take on some of the financial risk for banks who offer these mortgages, and it will be launched across the UK in April.

Shadow housing secretary Thangam Debbonaire raised concerns about the scheme, saying young people need "genuinely affordable" new houses, not cheaper, easier to get loans.

He said Britain shouldn't go "back to the days of sky-high mortgages".

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Mr Sunak, who put into place the Eat Out To Help Out Scheme in summer of 2020, said the public are facing a financial "challenge" due to the pandemic.

He said the Treasury is willing to do "whatever it takes" to "protect the British public" through the crisis, starting with helping Brits get on the property ladder.

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Speaking to the Financial Times, Mr Sunak said: "I will do whatever it takes to protect the British people through this crisis and I remain committed to that.

"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."

It comes after the government said it borrowed £271bn this financial year – up £222bn on 2019-20.

The shocking figure has now pushed national debt to a high of £2.3trillion.

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