Rachel Reeves is expected to announce a permanent mortgage guarantee scheme next week as part of broader efforts to support first-time buyers during periods of economic stress, the Financial Times has reported.
The programme, to be called 'Freedom to Buy', will be unveiled in Reeves’ upcoming Mansion House speech on July 15, the report said.
According to officials cited, the move is part of Labour’s commitment to easing access to home ownership, particularly for those with low deposits.
A mortgage guarantee scheme was introduced under the previous Conservative government in 2021 as a temporary response to the housing market challenges during the Covid-19 pandemic, an initiative that expired at the end of June.
Under the new framework, lenders offering 95% loan-to-value (LTV) mortgages will receive government backing in the event of repossession, with the Treasury charging fees to cover potential losses.