NewBuy was launched by the government on 12th March 2012. It is a scheme designed to help house-hunters by underwriting 95% mortgages with participating lenders, so that they will grant affordable mortgages to buyers of new-build homes who only have a 5% deposit to offer.
The government and housebuilder jointly underwrite the loan, so that the lender is taking less of a risk and will therefore reduce the interest rate on the mortgage. It is hoped that up to 100,000 homebuyers could benefit from NewBuy.
The key points of NewBuy are:
At the time of launch, three major mortgage lenders were signed up to NewBuy - NatWest, Nationwide and Barclays. They have since been joined by Aldermore, Halifax and Santander.
The Home Builders Federation stated that in all, some 130 housebuilders had expressed an interest in participating in the scheme. Current participating housebuilders are: