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NewBuy reservations hit 1,500

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by Jan Harris
NewBuy reservations hit 1,500

The government’s NewBuy mortgage scheme has reached 1,500 reservations according to the Home Builders Federation (HBF).

The scheme is designed to help boost the number of mortgages available to home buyers with smaller deposits.

NewBuy mortgages are available to buyers of new build properties who have just a 5 per cent deposit on their new home.

The scheme is underwritten by the government and participating developers contribute 3.5 per cent of the value of every NewBuy home sold to a fund to protect the lender in the event of a default.

Lenders have tightened up their lending criteria in recent years and this safety net is designed to give lenders the confidence to offer mortgages to customers with lower deposits.

The number of NewBuy mortgages approved has increased significantly in recently weeks.

Thirty builders have signed up to sell homes through the scheme and mortgages are offered by six lenders: Aldermore, Halifax, Santander, Natwest, Nationwide and Barclays.

House builders Redrow and Barratt have called for NewBuy mortgage rates to be made more competitive and for the scheme to be extended to second hand homes.

This week the Halifax has extended its 7-year mortgage to NewBuy customers at 95 per cent LTV.

The deal is available through the Halifax branch network and selected intermediaries.

Stephen Noakes, Mortgage Director, Halifax, said: “This seven year fixed rate mortgage provides the certainty of set monthly payments over a greater length of time.

“By offering a much more compelling deal, we are putting the purchase of a new-build homes back within the grasp of first time buyers and homemovers, while increasing our support for the NewBuy scheme; hopefully giving a much needed boost to housing supply.”

Details of house-builders offering properties through NewBuy are available on the official NewBuy website at www.newbuy.org.uk/what-to-do-next.

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News posted: September 25, 2012

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