Saving a large enough deposit to satisfy the mortgage company is one of the biggest hurdles facing homebuyers today. The government's NewBuy scheme, introduced in March 2012, aims to address this by offering creditworthy purchasers access to mortgages that only require a 5% deposit. At Barratt Homes' developments of new homes in Cambridgeshire, this reduces the amount needed to buy a property from at least £21,000 to around £7,000.
NewBuy is open to first-time buyers and homeowners looking to move, and is available on properties valued up to £500,000. Barratt is offering a variety of property types available under the NewBuy scheme at its Cathedral View development in Ely, with its selection of two- and three-bedroom houses for sale, and at Summers Field in Cambridge, which offers a mix of two-, three- and four-bedroom properties.
Barratt Homes sales director Sue Blackman says: "We see this as a game changer for the Cambridgeshire housing market. Creditworthy families who have put their plans to buy a new home on hold for the last few years can once again think of their future. It's fantastic news for local homebuyers and the economy alike. Many have been frustrated with the huge deposits of 15% or more needed on the open market and the new scheme is enabling homebuyers to finally get moving. Thanks to this scheme the deposit needed for a new home has been radically reduced - customers can borrow more at a lower interest rate than was previously the case."
Prices start at £140,000 at Cathedral View. With a typical 85% mortgage, a buyer would need to put down £21,000 - with NewBuy, that requirement comes down to £7,000. At Summers Field, prices start at £160,000 and the minimum typical deposit of £24,000 is reduced to £8,000 with a 95% NewBuy mortgage. Over 1,300 people have already been able to purchase a home with a NewBuy mortgage since its launch and Barratt Homes has noticed that interest in its new-build homes has increased in that time and that Newbuy is gaining momentum.
Sue adds: "We're beginning to see significantly more sales using this scheme and homebuyers' confidence is growing. But it's important to understand that the scheme only applies to new-build properties in the area and is not available for second hand homes."