New Government scheme most significant since crash
15 March 2012
Today’s launch of a new Government-backed mortgage scheme is the most significant boost the mortgage market has received since the economic crisis first hit the housing market in 2007.
Mike Farley, group chief executive of Persimmon, said the new mortgage indemnity scheme - NewBuy - which is officially being launched today by the Government, is the first in several years to offer people in England the chance to buy a new home with only a five per cent deposit.
“Today’s launch of NewBuy by the Government is hugely significant as it removes the obstacle of a large deposit which has been a key factor holding back the housing market in recent years. NewBuy opens up a 95 per cent mortgage product to both first-time buyers and those looking to move up the property ladder. Importantly, it has no salary cap and is available to purchasers of new homes up to the value of £500,000.
“Initial rates from the large highstreet lenders to support this product look very favourable, making NewBuy an attractive mortgage option for buyers of new build homes. NewBuy is a much-needed shot in the arm for the whole housing sector and – with research showing every new home built creates five jobs – the Government’s provision of up to 100,000 NewBuy mortgages will also give a welcome boost to UK growth and employment.”
A similar scheme for Scotland is currently being looked at, with a view to launch in the coming months.