The government’s mortgage guarantee scheme has supported 44,383 loans since its launch in 2021, but official figures show the number has been falling each year.

From the scheme’s launch in April 2021 to the end of that year, it supported 12,223 mortgages worth a total of £2.2bn.

Then in 2022 – it’s first full year in operation – it supported 21,374 mortgages worth £4.3bn.

But in 2023 the figure slumped back to 7,487 mortgages totalling £1.7bn.

And in the first three months of this year the scheme supported only 1,618 mortgages.

The latest figures published by the government today only go as far as April 2024 so it remains to be seen whether lending will pick up over the rest of this year.

Since its inception, the loans supported by the scheme make up 1.5% of all residential mortgage completions over the period.

Guarantees under the scheme represent a total of £1.2bn, while the total value of mortgages it has supported is £8.5bn.

Under the scheme, the government offers lenders the option to purchase a guarantee on mortgage loans where the borrower has a deposit of less than 10%. 

The scheme can be used for mortgages on both new build and older homes, whether they are for first-time buyers, home movers or borrowers who are remortgaging.

The scheme is not available on buy-to-let mortgages or second homes and the property value must be £600,000 or less.

The guarantee compensates participating mortgage lenders for a portion of net losses suffered in the event of repossession. 

The guarantee applies down to 80% of the purchase value of the guaranteed property covering 95% of these net losses. 

The lender retains a 5% risk in the portion of losses covered by the guarantee. 

The government says: “This ensures that the lender retains some risk in every mortgage originated.”