Rachel Reeves to launch a permanent mortgage guarantee scheme

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Chancellor Rachel Reeves will launch a permanent plan next week to ensure mortgage to help buyers for the first time the housing ladder during times of economic tension.

Reeves will confirm the government -backed plan in its speech at the house of its palace, as part of a set of measures that it claims will help ordinary voters with their money, according to officials who have been informed of its plans.

In April 2021, the conservative government launched a mortgage guarantee plan during the Covid’s pandemic, but it was supposed to be a temporary procedure and the expiration of its validity at the end of last month.

Reeves will confirm a pledge to make the Labor Party statement to make the plan permanently, as the state guarantees real estate loans to help buyers who have deposits of up to 5 percent, especially in difficult economic times.

Under this scheme, lenders will restore freedom to purchase, pay fees for the Ministry of Treasury to provide guarantees against potential losses on real estate loans by 95 percent of the loan to value in case of re -ownership.

Emma Reynolds, Minister of City, He said last month That “the maximum emergency commitment under the plan will be allocated for 3.2 billion pounds,” but the Treasury has ruled the risks to the taxpayer as “low”.

“Our new scheme will guarantee those who have a deposit of up to 5 percent who can access the appropriate mortgage products,” said Reynolds.

The fees that lenders pay to the cabinet aim to reach the plan to cover potential obligations, and the maximum will be 3.2 billion pounds on emergency obligations at the same level set by the conservatives in December 2022.

“The plan will be permanently available, and it ends the availability of stopping the existing temporary plan and giving lenders confidence to provide these mortgage products through the economic cycle,” said Reynolds.

Reeves’s house speech on July 15 will be its first major intervention since the government’s social welfare reforms collapsed this month and its subsequent tear in the House of Commons.

Her letter will also be launched to Grandees City Isa repairs To encourage more savings to be placed in stocks and stocks, instead of cash, with the aim of generating higher returns.

Paul Broadheed, head of mortgage and housing policy in Society Association AssociationHe welcomed the announcement of the permanent mortgage guarantee plan, but he said it was very important for the government to provide its promise to increase housing supplies.

The Dukir House, Chief Trading Employee at the Little Home at home, who focuses on getting Buyers for the first time To the property ladder, he said: “It is possible that its true advantage is to soften the course.

“The lenders usually tend to restrict the availability of these types of products and what is nice is that this successor means that lenders will feel more stimulating to maintain these products on the market.”

But Martin Stewart, the founder of the mortgage broker in London, called the “meaningless”.

He added: “The number of available products that will help some buyers for the first time and other borrowers, but regardless of this, the lenders will remain cautious regardless of whether the government has agreed to ensure some losses.”