NewBuy Guarantee declared open for business - scheme offers mortgages on new-build properties with much smaller deposits.
An ambitious new scheme that will unlock the aspirations of a new generation of homebuyers and get Britain building thousands of new homes has been unveiled by Prime Minister David Cameron, Communities Dept. Secretary of State Eric Pickles and Housing Minister Grant Shapps today.
The NewBuy Guarantee was declared open for business - the scheme brings lenders, builders and the Government together to offer mortgages on new-build properties with much smaller deposits than currently required - enabling an estimated 100,000 prospective and existing homeowners to buy a new home. The scheme is open for both first time buyers and those looking to move who own a property already.
The increased demand for new homes will also give a boost to house builders and the economy, and will support 50,000 construction jobs.
Today’s deals will mean that rather than a typical buyer saving a £40,000 deposit, they will now only need £10,000.
The scheme has already attracted strong support from many of the country’s biggest house builders and mortgage lenders, and will offer help for up to 100,000 buyers who would otherwise be frozen out of the market.
The deals include:
- Barclays who will offer 95 per cent Loan-to-Value mortgages on properties built by Barratt, Bellway, Bovis, Persimmon, Redrow and Taylor Wimpey at just 4.99 per cent fixed rate for two years and 5.89 per cent fixed rate for four years
- Nationwide who will offer 95 per cent Loan-to-Value mortgages on properties built by Barratt, Bovis, Bellway, Persimmon, Redrow and Taylor Wimpey at just 5.69 per cent fixed rate for three years and 5.99 fixed rate for five years; and
- NatWest who will offer 95 per cent Loan-to-Value mortgages on properties built by Barratt, Bellway, Bovis, Linden Homes, Persimmon, Redrow and Taylor Wimpey at just 4.29 per cent fixed rate for two years and 4.99 per cent fixed rate for five years.
In addition, Crest Nicholson will be joining the scheme imminently. The housing companies involved in the scheme cover 85% of the market.
The NewBuy Guarantee will support an estimated 50,000 jobs in construction and related industries by increasing demand for newly-built homes.
At the same time, the Minister announced details of the reinvigorated Right to Buy, which will give up to two million social tenants the opportunity to buy their council home with a discount of up to £75,000 and, for the first time, ensure that additional properties sold are replaced with new affordable homes for rent.
Prime Minister David Cameron said:
Strong families and stable communities are built from good homes. That’s why I want us to build more homes and I want more people to have the chance to own their own home.
We are acting today across the board to make this happen.
We’re re-booting the right to buy scheme to increase discounts for two million tenants in social housing in England.
And we’re delivering on our promise to offer affordable mortgages to buyers who might otherwise not be able to raise the money to buy a newly-built home.
It’s no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital.
So we’re working with leading house builders and lenders to get the scheme underway. “It’s a vital boost to the housing market, giving people good affordable new homes and backing thousands of jobs in construction in the process.
This government doesn’t just talk about expanding home ownership: we’re making it happen.
Housing Minister Grant Shapps said:
This Government inherited a housing market in disarray, with millions of hard working people blocked from taking their first step on the housing ladder - their desire to buy a home no longer a dream, but a distant fantasy.
We want to help everyone achieve their aspirations, and feel the pride of home ownership. So I’m delighted that from today the NewBuy Guarantee will give thousands of prospective buyers the chance to buy a home with a fraction of the deposit normally required.