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Jeremy Hunt could allow Brits to buy a home with just a 1% deposit as Chancellor ‘draws up Budget plans for a 99% mortgage scheme’ in Tory bid to woo younger voters ahead of the election


Britons could be allowed to buy a home with just a 1 per cent deposit under plans reportedly being drawn up by Jeremy Hunt ahead of next month’s Budget.

The Chancellor is said to be considering a 99 per cent mortgage scheme as the Tories try and woo younger voters ahead of the general election.

It has emerged how the Government would act as a loan backer under the proposals, with ministers keen to support people struggling to get on the housing ladder.

Under a 99 per cent mortgage scheme, buyers would only have to put up a £2,850 deposit to buy a house at the UK average price of £285,000.

This compares to a deposit of £14,250 with a 95 per cent mortgage, or £28,500 with a 90 per cent mortgage.

But industry figures warned of a greater risk of homeowners falling into negative equity, which is where the value of a property falls below the outstanding debt secured on it.

They also said plans for 99 per cent mortgages would do little to address the affordability of mortgages themselves, high house prices, or a lack of housebuilding.

Chancellor Jeremy Hunt is said to be considering a 99 per cent mortgage scheme as the Tories try and woo younger voters ahead of the general election

Chancellor Jeremy Hunt is said to be considering a 99 per cent mortgage scheme as the Tories try and woo younger voters ahead of the general election

It has emerged how the Government would act as a loan backer under the proposals, with ministers keen to support people struggling to get on the housing ladder

It has emerged how the Government would act as a loan backer under the proposals, with ministers keen to support people struggling to get on the housing ladder

Government figures told the Financial Times that no final decision had been made over the 99 per cent mortgage plan but said the Treasury-backed scheme was likely to be in the Chancellor’s Budget on March 6.

Neal Hudson, housing market analyst at Residential Analysts, told the newspaper: ‘There would be a greater risk of negative equity obviously with this.

‘You’d also be paying a premium mortgage rate, and it doesn’t necessarily address the problem of high prices.’

Lucian Cook, head of residential research at estate agency Savills, warned any scheme that boosted buyer numbers would need to be matched with measures to increase the supply of housing.

‘You might be addressing the deposit affordability issue, but you’re still left with the mortgage affordability issue,’ he said.

Emma Humphreys, a partner at law firm Charles Russell Speechlys, said: ‘These proposals would help first time buyers afford a deposit, but they don’t fix the issue of affording a home.

‘This growing matter of mortgage affordability would only be exacerbated by 99% per cent mortgages, as more people on the market increases demand and competitiveness.

‘This fundamental issue comes back to supply and demand. The Government simply needs to build more affordable housing, rather than announce temporary measures which are sticker plasters covering the real issue.’

Prime Minister Rishi Sunak announced a 95 per cent mortgage scheme when he was Chancellor in 2021.

The new mortgage guarantee scheme enabled homebuyers to secure a mortgage up to £600,000 with a 5 per cent deposit.

At his Autumn Statement in November, Mr Hunt extended the scheme until June 2025.

Ministers said the scheme had already supported more than 37,000 households buy their homes, with the overwhelming number of them first-time buyers.

Mr Sunak last week admitted the Tories had ‘much more to do’ to help younger people get on the housing ladder.

He wrote in The Times: ‘A home gives us a stake in the success of our economy and our country.

‘So I understand people’s anger when that dream feels too far away for too many, especially the younger generation.’

The PM pledged to drive through plans to build hundreds of thousands of new homes in Britain’s biggest cities.



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