The Government is set to announce in Wednesday’s Budget a new mortgage guarantee scheme, to be launched in April this year, which will allow buyers in England to obtain a mortgage with only 5% of the property value as a deposit.

The Treasury will guarantee a portion of the loans on homes worth up to £600,000 for first time buyers and existing homeowners. The move comes after the number of mortgage deals available for buyers with a 5% deposit fell from 405 in February 2020 to just 5 at the start of this month, according to data from Moneyfacts, the comparison website.

The hope is previously cautious banks and building societies will be encouraged by the Government support to begin providing riskier, higher loan-to-value mortgages again; boasting the market and encouraging a new generation of homeowners.