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Tens of thousands of young people will be able to make it on to the housing ladder under a Government-backed mortgage scheme to be unveiled by Rishi Sunak in next week’s Budget.
Under plans to turn “generation rent” into “generation buy”, the Treasury will offer lenders a guarantee to ensure they can issue mortgages to first-time buyers and current homeowners covering 95 per cent of property value, up to £600,000.
This means buyers will need just a five per cent deposit. The proposals have been drawn up by Treasury officials in recent weeks, with discussions with banks well advanced.
It is expected to closely resemble the Help to Buy mortgage guarantee scheme, introduced by David Cameron’s administration.
On Friday night, the Chancellor said: “By giving lenders the option of a government guarantee on 95 per cent mortgages, many more products will become available, helping people to achieve their dream and get on the housing ladder.”
Meanwhile, in an interview with the Financial Times, Mr Sunak warned he would “level with people” over the “enormous strains” in Britain’s public finances due to the pandemic.
Although Wednesday’s Budget will see many of the coronavirus support schemes, such as furlough, rolled over while lockdown restrictions remain, the Chancellor said that tax rises would be needed in the long-term.
In the Budget, Mr Sunak will also announce a £126 million cash injection for apprenticeships, which will include a programme enabling trainees to work at multiple companies.
In an expansion of his “plan for jobs”, the Chancellor will boost the cash incentives for firms that give apprentices a job after their training.
The current £2,000 payment to firms for taking on 16 to 24-year-olds, as well as the £1,500 reward for over-25s, will be replaced with a simpler incentive of £3,000, which will apply for all age groups.
Mr Sunak will also set out plans for new “flexi-job” apprenticeships, enabling trainees to develop their skills with a range of employers within a particular sector.
The trainees will be linked to an agency that will place them with relevant organisations. The package is expected to help create 40,000 new traineeships.
Meanwhile, the Treasury is also expected to announce the creation of 10 new low-tax “free ports”, at least seven of which will be based in England, as part of the Government’s levelling up agenda.
The Chancellor met the Prime Minister on Thursday evening to discuss the applications for the new economic zones, which were first proposed by Mr Sunak as a backbench MP.
Bids from areas across the country were submitted earlier this year, with the successful zones benefiting from a package of tax reliefs, as well as simplified customs procedures and relaxations around planning processes.
On Friday, the Chancellor confirmed that he would create a new fast-track visa route for tech workers, as first revealed by The Telegraph.
The tech visas will be launched to help fast-growing companies recruit from across the world post-Brexit, one of a series of recommendations made to bolster Britain’s fintech industry.