Help to Buy Two, a mortgage guarantee scheme offered by the Government allowing just a 5 percent deposit to secure a mortgage, was introduced in October 2013. Back then only around 50 mortgage products were on the market offering a mortgage to buyers with just a 5 percent deposit.
Since the Government introduced the scheme to back the mortgages of borrowers with small deposits the number of products with a 95 percent loan-to-value has steadily increased. As of this month the first-time buyer now has a choice of around 270 mortgages with just 5 percent deposit required.
The mortgages are more prevalent in the North as the lower house prices mean that a first-time buyer can meet the requirements of the affordability checks for taking on such as large loan value. In the South, especially in London, the property values are too high to allow loan-to-income ratios to be satisfied.
Help to Buy Two is set to come to an end at the close of 2016 leaving struggling buyers with just the support of the first version of the scheme where the Government loans the difference between the mortgage amount and the deposit the buyer has.