Focus on Banking Stocks as UK Launches 95 Per Cent Mortgage Scheme

Summary

  • Leading banks launched a new government-backed low-deposit mortgage scheme.
  • The scheme has been made available by Lloyds, Santander, Barclays, HSBC, and NatWest.
  • Chancellor Rishi Sunak said that with the news scheme, the UK housing market would see the availability of more products, boost the sector’s growth, create new jobs, and help people get homes.

A new government-backed mortgage scheme, which was first announced in the Budget 2021, has been officially launched in the UK from 19 April. It is expected to help first-time buyers secure a mortgage with just a 5 per cent deposit to buy a home priced below £600,000.

The scheme is expected to raise the supply of 5 per cent deposit mortgages for credit-worthy households by supporting lenders to offer these products. The news came on the day when Rightmove’s latest survey reported that the UK house prices surged 2.1 per cent for April, reaching a new all-time high of £327,797.

Subject to the usual affordability checks, the UK government would be offering lenders the guarantee that they need to provide mortgages to cover the other 95 per cent. 

Chancellor Rishi Sunak said that by providing a government guarantee to the lenders, the UK housing market would see the availability of many more products, boost the sector’s growth, create new jobs and help more people get their own homes.

Housing Secretary Rt Hon Robert Jenrick MP said that the new mortgage guarantee scheme should help people get on the property ladder without the burden of a large deposit.

The scheme has initially been made available by major banks like Lloyds, Santander, Barclays, HSBC and NatWest, who launched it on Monday itself. Virgin Money would be launching it next month.

                           

                                                  

Copyright © 2021 Kalkine Media Pty Ltd. 

Let us take a look at the latest stock performance of these banks at the London Stock Exchange.

The share price of Lloyds Banking Group Plc (LON: LLOY) ended GBX 42.05 on Tuesday. The bank resumed its dividend payments, though its pre-tax profits dropped to £1.2 billion for 2020.

The shares of Banco Santander S.A. (LON: BNC) ended at GBX 243.75 on 20 April. Susan Allen, CEO Retail and Business Banking, Santander, said that the bank was pleased to be part of the government’s new mortgage guarantee scheme and would use its widescale experience to support the customers throughout the home buying process.

Barclays Plc’s (LON: BARC) share price declined to close at GBX 181.80 on Tuesday at the LSE.

The shares of HSBC Holdings Plc (LON: HSBA) last traded at a value of GBX 417.25 on Tuesday. Michelle Andrews, Head of Buying A Home, HSBC UK said that this scheme would make a real difference during these pandemic times in enabling first time buyers to get the keys to their new home.

NatWest Group Plc’s (LON: NWG) shares closed at GBX 193.00 on 20 April. Miguel Sard, Managing Director of Home Buying and Ownership, NatWest said that the bank welcomed the government’s new mortgage guarantee scheme to provide further support to people with small deposits. Saving a big amount can be particularly tough for young and first-time homebuyers, and this scheme will help such people buy their dream house, he added.


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is not authorised or regulated by the Financial Conduct Authority to provide regulated advice. The purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. The Content is guidance about the different types of investments that are available and sets out general principles to continue before making investment decisions. Kalkine Media is neither authorised nor qualified to provide regulated investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from an appropriately authorised and/or qualified financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.