By Kellie Steed, mortgage

Jeremy Hunt’s second Autumn Statement was delivered today, and many mortgage holders will, understandably, have been poised and hoping to hear some good news. Mortgage rates and house prices, whilst in slow and steady decline for the most part, have recently made home ownership a painful prospect for many who already have or need a mortgage.

However, tax and national insurance cuts, alongside a rise in the minimum wage from April 2024, overshadowed most of the remaining ‘110 measures for growth’ announced by the chancellor today. While a slight increase in the average paycheck could ease a small element of the burden caused by costly mortgage repayments, there’s little more of significant value for the majority of homeowners in today’s statement.

In some good news for commercial investors, business planning permission applications will be refunded in full, if the council responsible fails to meet guaranteed faster turnaround times. This is in an effort to prevent commercial planning application delays. “Buy-to-let landlords can take some comfort in the raising of local housing allowance thresholds and universal credit increases announced. This should help those tenants struggling to pay the large rent increases they’ve seen over the past year.

Many landlords were forced to push up rents as a result of multiple base rate rises, which left mortgage rates high and profit margins narrower for most investors.

Mortgage guarantee scheme extension

In an easy win for the government, they also announced an extension to the mortgage guarantee scheme. This was due to end on 31 December this year, however, it will now be available for a further 18 months, until June 2025.

The mortgage guarantee scheme was introduced during the pandemic, as a way to encourage weary lenders back to higher LTV (loan to value) lending. It protects the lender, rather than the borrower, with the government covering some of the loss lenders’ offering 95% LTV mortgages under the scheme would make, if borrowers are unable to pay.

While the scheme did go some way to whipping up a reluctant lending market back in 2021, the vast majority of mortgage providers have now returned to 95% LTV lending without the scheme’s backing. This means that, sadly, this gesture is unlikely to benefit a significant number of first-time buyers.

In fact, in today’s market, particularly, many buyers are looking for the lower interest rates achievable with a larger deposit – as they may very well be unable to afford 95% LTV mortgage rates.

What other options are there for first-time buyers?

Thankfully, there are a range of other schemes that provide routes into home ownership for those on a low income or struggling to save a large enough deposit. However, as with any mortgage, there are positive and negative factors to consider, so be sure to seek advice from a qualified broker.

1 Shared ownership – this long running scheme allows borrowers to purchase between 10-75% of a property initially, with most housing associations allowing further shares to be purchased up to an eventual 100% ownership

2 Rent-to-buy – This scheme attempts to provide an easier transition from tenant to homeowner by offering a discounted rent on specific properties. Savings made on rent can then to go towards a deposit to eventually buy your rented home

3 Deposit unlock – The first non-government home ownership scheme was introduced in 2021. It allows homes from participating house builders to purchase a new build home with a 95% mortgage from an associated lender. This makes new build homes, which typically require a higher deposit of around 15%, more achievable for first-time buyers”