The government has increased speed on their plans to introduce a 1% deposit scheme into the housing market. Also known as a 99% loan to value (LTV), the scheme has a view to assist First -Time Buyers purchase homes and ease the financial barrier to homeownership, with the UK government guaranteeing the mortgages. This new scheme is the first of its kind in the UK allowing First time buyers to live in their home rent free, with monthly payments going towards a deposit on their property, rather than a landlord. 

This would be similar to the existing help-to-buy mortgage guarantee scheme, which purpose is to help those buying homes with 5% deposit. It has been researched that the policy no doubt with be welcomed by some first-time buyers. Although it has been mentioned that it could potentially increase house prices and that struggling first time buyers may not be able to afford the monthly repayments required on such a large mortgage, especially as rates remain high at present. 

The new scheme is aimed at potential buyers living with their parents, encouraging them that home ownership is possible as early as this year. Successful applicants must be first time buyers, over the age of 18, have a 1% deposit already, be in full time employment for more than 3 months & need to be qualifed by a third party financial advisor to confirm affordibility and credit score. Applicants are essentially exchanging on their property purchase and continue to make monthly instalments - 100% of which goes towards their deposit, until they complete on the purchase. 

The monthly amounts are based on the area's average monthly rent and the buyer's personal finances says the developer. There will be the option to overpay on the monthly amounts and complete sooner - the buyer would then 100% own their home, once legally completed.