Housing Minister Grant Shapps has today launched the NewBuy Guarantee, a scheme to boost demand for new houses by reducing the amount of deposit required (March 12).
The increased demand for new homes will also give a boost to housebuilders and the economy, and see thousands of workers returning to building sites across the country.
The scheme sees the return of the 95% Loan-to-Value mortgage, meaning that anyone wanting to purchase a new build home up to the value of £500,000 may do so with only a 5% deposit.
The Government and housebuilders will help provide security for the loan, so if the house is then sold for less than the outstanding mortgage total the lender will be able to recover its loss.
The housebuilders are Barratt, Bellway, Bovis, Persimmon, Redrow and Taylor Wimpey and the lenders are Barclays, Nationwide and NatWest.
The scheme will also help jumpstart the stalled housing market as people begin to move, ensuring more newly-built and older properties become available to buy.
Shapps said: “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.
Home Builders Federation Executive Chairman Stewart Baseley said: “NewBuy will help thousands of people to meet their aspirations to buy a new home, freeing up the housing market and helping first time buyers and those unable to take the next step on the ladder.
“The scheme will also provide a vital kick-start for the house builders large and small who will be able to build the homes and create the jobs that the country desperately needs.”