FIRST-TIME buyers in Cheshire could particularly benefit from the Government-backed five per cent deposit mortgage scheme, analysis suggests.

The new mortgage guarantee scheme, revealed in Chancellor Rishi Sunak's Budget, will be available to current homeowners as well as first-time buyers looking for a property worth up to £600,000.

What will it mean for first-time buyers in Cheshire?

In December, first-time buyers in Cheshire West spent an average of £186,150 on their property, according to Land Registry figures, with the number £198,930 in Cheshire East.

A 5 per cent deposit on a home costing this much would be £9,310 and £9,950 respectively raising the 95% mortgage would require a household income of £49,120 and £52,500.

That's based on what housing charity Shelter says is a ‘typical’ loan to income ratio of 3.6 – that is, a mortgage lender will allow a household to borrow 3.6 times their gross income for a home purchase.

Office for National Statistics data reveals that the gross median salary of a full-time employee in CWAC was around £31,370 and £32,600 in CEC in 2020.

As more than three-quarters of first-time buyers are couples, two people living and looking to buy their first home together in CWAC, with a combined median salary of £62,740, could therefore particularly benefit from the scheme.

The same can be said for CEC couples, who would have a combined income of £65,200.

What does this mean more broadly?

Richard Donnell, research director at UK property portal Zoopla, said supporting buyers with small deposits is key to widening access to home ownership.

He said: "Our analysis shows the scheme will have the greatest benefits for buyers in lower value housing markets in northern England and Scotland, where a 95 per cent mortgage is more attainable.

“The scheme will have less impact for buyers in southern England, where high house prices are a major barrier to being able to afford a 95 per cent mortgage. This all supports the levelling up narrative and policy approach of Government.”

The scheme, available from April, will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5 per cent.

Buyers will also have the option to fix their initial mortgage rate for at least five years, giving them certainty over their repayments.

It will be available for new mortgages on new or existing properties up to the end of 2022.

However, Polly Neate, Shelter chief executive, has criticised the government's latest attempt to help people onto the housing ladder as ‘peddling pipe dreams’.

She said: "Sadly, the mortgage guarantee announced by the Chancellor is pure window dressing.

"Research shows it won’t help most renters and has no hope of turning ‘Generation Rent’ into ‘Generation Buy’.

"Two-thirds of private renters have no savings at all, and there is no way they can scrape together the cash needed to afford a 5 per cent deposit, nor do they have the kind of income that would support a huge mortgage."

She added that the Government should provide ‘meaningful solutions’ to the housing crisis, including building more social homes that people can afford to live in.

The Treasury was contacted for comment.