The Mortgage Guarantee Scheme has been extended until the end of June 2025 in the Autumn Statement.
The government-backed scheme facilitates 95% loan-to-value mortgages, while it was due to expire in December of this year.
The scheme is valid on properties worth up to £600,000, while since its launch in April 2021 over 37,000 mortgages were completed by March of this year.
Some 86% of those using the scheme were first-time buyers.
Matt Smith, Rightmove’s mortgage expert, said: “Any focus and support for those with the smallest deposits is always going to be welcome.
“However, in reality the Mortgage Guarantee Scheme is only able to help a very small portion of movers, with the majority of first-time buyers preferring to get the affordability benefits of saving for a bigger deposit.
“If the scheme was cancelled then it may be seen as a disappointing outcome by some, but in reality it’s unlikely to have a significant impact on consumer choice, as many lenders are offering 5% deposit deals outside of the government scheme.”
This is the second extension, as the scheme was extended by a further year at the end of 2022.
Regardless of the scheme’s intensions, analysis from Rightmove shows that first-time buyers on the average salary could not afford to use the government’s 95% Mortgage Guarantee Scheme on three quarters of properties in the typical first-time buyer market, rising to 2% in London.