Newbuy, Government backed scheme to help first-time buyers get their feet onto the property ladder

March 13, 2012

CIA Let Property Blog

Most first-time buyers are struggling to raise a deposit for a mortgage so they can own their own home. Some deposits can be around £20,000 or even £40,000 which would take years of saving to get.

Now the government backed scheme ‘Newbuy’ is allowing first-time buyers to have the chance to own their own property and they may even only have to raise a deposit of 5%.

On new build homes (flats & houses) the buyer can get a mortgage of up to 95% of the purchase price and it is only available in England only.

If you are interested in a new build property and you already have at least a 5% deposit saved, you can go to a developer, mortgage lender or IFA (independent financial advisor) to see if you’re eligible for the new buy scheme.

Any mortgage applications will go through the normal process and will be assessed in the usual way.

If you pass all the steps to be accepted to get a mortgage (lenders affordability & credit criteria) you may be able to get up to 95% of the purchase price.

Direct Gov have added information on how you need to qualify on their website…

  • You must be a UK citizen or have the right to remain indefinitely in the country.

Newbuy properties must be:

  • New Build – Residential properties being sold for the first time or for the first time in the current form.
  • Priced up to £500,000 – but there will be no cap on income.
  • Full ownership – Newbuy is not available for shared ownership or shared equity purchases.
  • Primary homes – Newbuy will not be available for the purchase of second homes or for buy-to-let purchases.

If you are going to use the Newbuy scheme you cannot use and other publicly funded mortgage scheme or have an interest-only mortgage.

Grant Shapps, Housing Minister has said because younger people cannot afford deposits the average age of the first-time buyer has risen.

“I’m not prepared to stand by, and nor is the Government, to watch an entire generation of people be locked out of the housing market when they can afford proper mortgages” He commented.

For more information CLICK HERE to go to the Newbuy Government backed website.

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