In his Budget last week the chancellor Rt Hon Rishi Sunak MP set out how the government is going to support Britain through the coronavirus crisis, fix the public finances once we?re on the way to recovery and build our future economy. His support for consumers and businesses encompassed a slew of measures to support the housing market. These included an extension to the temporary cut in Stamp Duty Land Tax (which we had pushed for and will be welcome to all those buying or selling a home who were worried they might not hit the end of March deadline) and the introduction of a new Mortgage Guarantee Scheme.

Over the last year there has been a significant reduction in high loan-to-value (LTV) lending, particularly at 95 per cent, which means home buyers have had to find extra funds to afford the deposits required. According to recent research by Hometrack/Zoopla, just four per cent of mortgages in Q3 2020 were over 90 per cent LTV, down from seven per cent in mid-2019.

There are good reasons for the reduction. The coronavirus pandemic has required mortgage lenders to focus on helping their existing customers. Buyers with small deposits and stretched incomes need more time and expertise from lenders to make sure that they have a mortgage which is affordable and not cause financial difficulties at a later date. Lenders have an obligation to lend responsibly whilst taking into account their own individual risk appetites and forecasts on areas such as the future prospects for interest rates, the housing market and the wider UK economy.

The chancellor's answer to the reduced market is a new Mortgage Guarantee Scheme, which we understand will be closely modelled on the previous one developed in the wake of the global financial crisis. It will allow mortgage lenders to pay for insurance for the 'top slice? of a 90.1-95 per cent mortgage so that if the lender has been forced to repossess the property, but house prices have dipped, they will be compensated for losses down to 80 per cent of the purchase value.

It's aimed at home buyers looking for a repayment mortgage on a property at £600,000 or less, who can fulfil the normal requirements of a mortgage (like earning enough and having a good credit score) but are unable to secure a mortgage because the market for those with a relatively low amount of savings is restricted.

The scheme opens next month and several lenders have already signed up, with many more telling us they are interested in joining. It is due to run until the end of 2022, at which point the government hopes that the economy will have fully woken up from its coronavirus slumber. The lending industry backs the Mortgage Guarantee Scheme and we at UK Finance will be working with HM Treasury to make sure that all lenders who want to be part of it get the information and support they need.

For those looking to buy a property this means that they will again be able to do so even if they have modest savings. It is positive news for those looking to move, or get on the housing ladder - perhaps even taking advantage of reduced stamp duty?