THE UK will extend its mortgage guarantee programme, which helps people get on the property ladder, by one year in a bid to support the market through what the government called “difficult times”.

The programme, which started in April 2021 and sees the government offer lenders the financial guarantees needed to provide 95 per cent mortgages on houses worth up to £600,000 (S$989,107), was due to expire at the end of this month. It will now run to the end of December 2023, the Treasury said in a statement.

“For hard-working families facing today’s challenging economic conditions, it’s right that we continue to help them secure their first home or move into their dream house,” Chief Secretary to the Treasury John Glen said in a statement.

Extending the programme comes as Britain’s housing market is headed for its worst slump since the global financial crisis more than a decade ago, with rising interest rates and the cost-of-living squeeze hurting potential buyers. Nationwide Building Society and Halifax, two of the nation’s biggest mortgage lenders, say that prices fell in each of the past three months.

As of Nov 22, more than 24,000 households have been helped by the government mortgage guarantee programme, according to the Treasury statement. UK banks had been calling for the programme to be extended. BLOOMBERG