The government is today set to launch a 95% mortgage package aimed at helping both buyers and developers.
While there are 95% and even 100% mortgages available they often come with all sorts of restrictions and provisos. The idea of the Government backed deal is that all the major lenders are on board and it should be fairly straight forward.
The scheme was first covered and the detail explained on Manchester Confidential last November, and according to the House Builders Federation could help 100,000 buy their first home or move up to another property.
As it will only be eligible on new properties it should also help boost home building as existing stock gets bought so more can be built which in turn will secure and create construction jobs.
Stewart Baseley, Executive Chairman of the HBF 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 house builders large and small who will be able to build the homes and create the jobs that the country desperately needs.
“The launch of NewBuy is a credit to developers, lenders, JLT and government who have all shown real determination and imagination to address the key issue that has kept the housing market and house building subdued for the last few years.”
JLT is the Jardine Lloyd Thompson Group plc (JLT) an international group of risk specialists and employee benefits consultants which will be underwriting the government’s risk if buyers default.
There is no doubt that the need to raise a hefty deposit is preventing many people from buying their own home.
While there are 95% and even 100% mortgages available they often come with all sorts of restrictions and provisos. The idea of the government backed deal is that all the major lenders are on board and it should be fairly straight forward.
So, say you wanted to buy a one bedroomed apartment for £85,950 you would still have to be able to put down £4,300 but the terms of the mortgage should be more competitive.
NewBuy should not be confused with the government’s current initiative FirstBuy, which in turn should not be confused with the more catchall HomeBuy.
Whichever prefix you add to the word Buy, it adds up to the same thing, a way of helping buyers get a mortgage for a new build home.
And people need help, according to property company Plumlife deputy chief executive Matthew Harrison, 900 people applied for FirstBuy in January and February, more than the total number during the preceding five months.
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