NewBuy Scheme launched

On 12 March 2012 the Government launched a new scheme which will guarantee mortgages  with the aim of giving the housing market a kick start.

The NewBuy loan guarantee is designed to give buyers access to mortgages even if they only have a 5% deposit. Under the scheme, housing developers pay the lender 3.5% of the purchase price of a new-build property while the government provides an additional guarantee of 5.5%, to be called upon only if there is a crash in house prices

The scheme is available on flats and houses up to a maximum value of £500,000 and means a buyer requiring a £40,000 deposit for a £200,000 property will now only need £10,000. The scheme is open to anyone buying a property, but the government sees it as a means for first-time buyers in particular to purchase their first home.