News and Events

First-Time buyers' horizons broadened: The return of 95% mortgages

View profile for Wendi Coupland
  • Posted
  • Author

2020 saw 95% mortgages being withdrawn by lenders and only a handful remained, leaving little option for first-time buyers but to save more than a 5% deposit.  Covid-19 is being directly attributed to the reasons for the reduction in the availability of high loan-to-value mortgage products and these include the country going into lockdown and the property market freezing.  However, a new government-backed mortgage scheme was launched in April 2021 with the aim of helping first-time buyers to secure a mortgage with a 5% deposit and put their first foot on the property ladder.  Wendi Coupland, Associate in our Residential Conveyancing team, explains more here about the new scheme and how first time buyers will be supported in the future.

Why has the new 95% mortgage scheme been introduced?

Recent figures published by the Government have shown an increase in people wanting to own their own homes but at a time when 95% mortgages are not widely available.  The new scheme therefore aims to enable a new generation to realise their dream of home ownership by giving them access to mortgages without having to provide a large deposit.  Current home owners will also be able to benefit from the initiative.

The scheme came into effect on the 19th April 2021 and is available on property purchases of a purchase price of up to £600,000, including Help to Buy, Shared Ownership and First Homes Scheme transactions.    

Lenders who are offering lending as part of the scheme include:

  • Lloyds,
  • Santander,
  • Barclays,
  • HSBC,
  • NatWest.

Virgin Money will also be joining the scheme in May and other lenders may subsequently join which will provide a wider range of mortgage products from which to choose.

How does the new 95% mortgage scheme work?

The scheme is backed by the Government who will provide lenders with an option to purchase a guarantee which will compensate the lender for a portion of the net losses suffered in the event the property is repossessed in the future i.e. if the mortgage repayments are not kept up to date.  The guarantee will apply down to 80% of the purchase price of the property and will be valid for up to 7 years after the mortgage started, as it is believed that it’s less likely for a mortgage to default after a 7 year period. 

The scheme will not be around indefinitely and is open for new mortgage applications from April 2021 to December 2022.  Shortly before it is due to end, it will be reviewed by the Government to see if there is continuing need for the scheme and whether it should be extended. 

Speaking about the new initiative, Wendi commented, “It is a relief for those in the property market to see further support from the Government and recognition that first time buyers in particular are still facing a significant barrier in buying a property.  The support over the last 12 months with the Stamp Duty Holiday has led to the survival of the market during particularly difficult times, and this new initiative will go one step further in providing a more accessible market place.”

You can find out more information about the mortgage guarantee scheme by visiting the Government website or to discuss your purchase you can contact the Residential Conveyancing team using the phone numbers below, or email

  • Fareham: 01329 288121
  • Southampton: 023 8063 9311
  • Portsmouth:  023 9275 3575
  • Chandler’s Ford: 023 8071 7467
  • Waterlooville: 023 9277 6569


This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.