Latest Mortgage Guarantee Scheme statistics figures from the Treasury show that from April 2021 to end of June 2024, 45,775 mortgages have been supported by the scheme with a total value of £8.9bn
The scheme has supported a higher proportion of mortgages in the North West, South East and Scotland; and a lower proportion in London.
Commenting on the latest figures, Quilter mortgage expert Karen Noye said the 45,775 mortgages supported was a small number, with 87% of these going to first-time buyers. However, the average property value under the scheme was £204,716, significantly below the national average, raising questions about its ability to cater to those in more expensive parts of the country.
She argued that Labour’s pledge to make this scheme permanent under their rebranded Freedom to Buy initiative risked doubling down on policies that failed to meaningfully address affordability issues or the structural flaws in the housing market.
“While well-meaning, Labour’s plans do little to tackle the core problem of high house prices relative to wages, which continue to put homeownership out of reach for many. The reliance on 95% loan-to-value mortgages leaves buyers with minimal equity, increasing the risk of negative equity should house prices fall—a real concern in a volatile market. Schemes like these are more of a sticking plaster than a solution, helping only a fraction of buyers while doing nothing to address the broader affordability crisis.”
Noye said that adding to the strain on first-time buyers was Labour’s decision to not extend the increase to the stamp duty threshold—a move that has already sent ripples through the market.
“In the short term, this policy will trigger a rush of buyers scrambling to complete purchases before the threshold reduction takes effect, artificially inflating house prices as demand spikes. In the long term, it makes homeownership even more expensive for first-time buyers, eroding affordability further and exacerbating the very issues schemes like Freedom to Buy claim to solve.”
She added: “Labour’s approach seems to ignore the lessons of past initiatives like Help to Buy. While that scheme enjoyed more uptake, it saddled buyers with hidden costs, such as the government’s share of property appreciation, which added financial strain to homeowners. The rising interest rates on equity loans turned what was intended as a helping hand into an additional burden, illustrating the pitfalls of short-term fixes without meaningful market reform.
Noye insisted that without sufficient stock, no amount of demand-side intervention would solve the affordability crisis.
“Labour must prioritise policies that tackle the imbalance between supply and demand, such as incentivising housebuilding, streamlining planning processes, and increasing investment in affordable housing. These structural changes, coupled with measures to reduce the tax burden on first-time buyers, would go much further in supporting aspiring homeowners than merely tinkering with schemes that perpetuate the status quo.”