The government’s mortgage guarantee scheme has supported 44,383 loans since its launch in 2021, but official figures show this number is falling every year.
From the launch of the program in April 2021 to the end of that year, 12,223 mortgages worth a total of £2.2 billion were supported.
It then backed 21,374 mortgages worth £4.3 billion in 2022 – its first full year of operation.
But in 2023 the figure dropped to 7,487 mortgages totaling £1.7 billion.
And in the first three months of this year, the scheme supported just 1,618 mortgages.
The latest figures published by the government today only cover April 2024, so it remains to be seen whether lending will pick up for the rest of this year.
Since its inception, loans supported by the scheme have represented 1.5% of all residential mortgages repaid during the period.
Guarantees under the scheme total £1.2 billion, while the total value of the mortgages it has supported is £8.5 billion.
Under the scheme, the government offers lenders the opportunity to take out a guarantee on mortgage loans where the borrower has a down payment of less than 10%.
The scheme can be used for mortgages on both new-build and older homes, whether for first-time buyers, movers or refinancing borrowers.
The scheme is not available for buy-to-let mortgages or second homes and the value of the property must be £600,000 or less.
The guarantee compensates participating mortgage providers for a portion of the net losses they incur upon repossession.
The guarantee applies up to 80% of the purchase value of the guaranteed property and covers 95% of these net losses.
The lender retains a 5% risk on the portion of losses covered by the guarantee.
The government says: “This ensures that the lender retains a certain risk with every mortgage.”