» NewBuy Scheme to help first time buyers

Scheme will also help construction industry

Article Published: 13th March 2012

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The government backed NewBuy Guarantee scheme which was developed to enable cash strapped home buyers struggling to get on to the property ladder will begin running in England. The scheme is not just for first time buyers, those buying can have bought a home previously but they must fit all of the relevant criteria. The scheme will offer buyers a mortgage with a large loan to value ratio and the property must be a new build one, many developers have already signed up to the scheme. The government hope that the scheme will also help the struggling construction industry by way of further employment.

First time buyers will only need a 5% deposit and is only running in England with builders or developers who have signed up to the scheme. The property cannot be bought to let out and must be valued at £500,000 or less. The deposit must come from personal savings and will not be accepted if it is through a local authority.

The scheme is only open to British citizens who will be sourcing their loan through three lenders, Barclays, Nationwide and NatWest. Halifax and Santander have expressed interest in joining the scheme. The mortgage will be on a fixed rate and there will be no protection for buyers if they fall into negative equity during the lifetime of the mortgage.