The Help to Buy mortgage guarantee scheme is that rare thing – a government scheme that actually worked.

So says the Council of Mortgage Lenders of the scheme which helps buyers with small deposits get on the housing ladder while letting them choose to buy a secondhand home.

The scheme is due to finish in just over four months’ time, although the other Help to Buy scheme, an equity loan on new homes only, is set to continue.

In analysis on the CML website, author Mohammed Jamei says: “The Help to Buy mortgage guarantee scheme is set to close at the end of this year. Relatively little has been said about it, compared to its sibling, the equity loan scheme. We thought it would be a pity if its planned demise went unnoticed.

“The mortgage guarantee scheme was introduced to help with the lack of supply of higher loan-to-value mortgages back in 2013. It was announced as a temporary scheme across the UK, aimed at addressing a specific problem that was cyclical. The view was to close it in three years’ time, that is, by the end of 2016.

“It offers lenders insurance in the event that a property covered by the scheme is taken into possession. The insurance covers 80% of the property’s value, with the lender taking a 5% share of any losses. The value of any property under the scheme is capped at £600,000 and in June 2014 the maximum loan-to-income (LTI) was capped at 4.5 times borrowers’ income, following the LTI caps introduced by the Bank of England.

“Lender participation is optional which, in itself, is rather different to other schemes where lenders would be encouraged to sign up. Lenders are charged a commercial fee if they participate, to cover the cost of running the scheme.

“The aim has been to help would-be – and creditworthy – home owners with a small deposit to transact or get on the housing ladder. These people might otherwise be locked out of the market.”

So far under the scheme, nearly 79,000 loans have been made under the Help to Buy mortgage guarantee scheme, with 95% outside London.

The average loan to value has been 94% compared with an average of 54%. The average age of the borrower has been 30, compared to 38 outside the scheme, and nearly 80% have been first-time buyers.

The article concludes: “The fact there are lenders operating outside of the scheme is no bad thing. The scheme played a key role in jump starting higher LTV lending at a time when confidence around house price growth – and the economy – was low.

“But, as time went on, it has also been important for lenders to operate outside of the scheme, which shows confidence has returned to the market.

“As a result, the distortion caused by closing the scheme is likely to be small. It is likely that some would-be buyers will bring their plans forward at the end of this year, which will cause a small drop-off in loans in the first few months of 2017. But given the disruption caused by the change in Stamp Duty, this is likely to be a small blip in comparison.”