Lenders push Kwarteng to extend mortgage guarantee scheme
Chancellor of the Exchequer Kwasi Kwarteng is seen at the Conservative Party's annual conference in BirminghamThe UK's biggest mortgage lenders will urge the chancellor to extend a government home loans initiative which helps first-time buyers get onto the property ladder.
Sky News understands that executives from major banks and Nationwide, Britain's biggest building society, will ask Kwasi Kwarteng to commit to renewing the Mortgage Guarantee Scheme, which is scheduled to expire at the end of the year. Launched in the spring of 2021, the scheme gives lenders an option to underwrite through the government the losses incurred on mortgages above 80% of the purchase price of a property.
The request to extend the scheme will form part of the banks' agenda as they and the Treasury seek to address the disruption in the mortgage market following Mr Kwarteng's 'mini-Budget' last month.Lenders will also highlight the need for stability in financial markets in order to price home loans properly, and will flag potential risks under the City watchdog's new 'consumer duty' from agreeing to unaffordable mortgage loans.
Hundreds of mortgage deals have been pulled or frozen by banks in the last fortnight as a result of volatility in how banks price such loans.
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