An initiative to assist individuals get on the housing ladder will be given an additional year.

The programme, which was scheduled to conclude at the end of December, was described by the government as aiding purchasers in “navigating tough circumstances.”

It was initially intended to encourage lenders to offer property loans to borrowers who put down 5% of the purchase price—a product that was far less readily accessible during Covid.

Despite the growing cost of living for purchasers, some lenders continue to be cautious.

John Glen, the chief secretary of the Treasury, said: “It is right that we continue to assist hard-working families in securing their first property or moving into their dream home in the face of today’s difficult economic conditions”.

Extending this programme increases the number of people who may profit from it and helps the market survive these challenging times.

Banks frequently see these 95% loan-to-value mortgages as riskier since they are more susceptible to dropping real estate values and there is a possibility that borrowers may have more debt than their homes are worth.

According to the program, if the property is repossessed, the government assumes some of the risk and reimburses the lender for a portion of the loan.

Some brokers said the programme had succeeded in its goal of increasing the availability of low-deposit mortgages, while others claimed the programme had only been utilised by a few lenders.