The Government has today announced it will in March launch a scheme which is aimed at those looking to purchase new-build homes.
The ‘NewBuy Guarantee scheme’, will allow lenders to offer large mortgages on new-build homes without running the risk of losing money if the property falls into negative equity and is repossessed. Essentially the loan will be guaranteed by the developers and government (taxpayers).
It is hoped this will enable would be movers looking to buy a new-build property up to the value of £500,000 to overcome the problem of finding large sums of money to put down as a deposit. The scheme is looking at underwriting 95% mortgages.
It is reported, Nationwide building Society, one of the lenders which will take part, is currently working with the government to work out exactly how the scheme will operate.
The Council of Mortgage Lenders said discussions are on-going, and when the final details are announced the £500,000 cap could vary around the country.
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