The announcement by the Prime Minister today of a new Government backed mortgage scheme for new home buyers, will provide a much needed boost to an industry that has been under the cosh in recent years, according to housebuilder Bellway.
The NewBuy 95% mortgage will mean more house hunters will be able to buy with confidence, the scheme that is jointly funded by the housing developers and the Government, will see major high street lenders offering NewBuy mortgages at competitive interest rates that will help people to move and first time buyers to get on the housing ladder.
Commenting on the NewBuy scheme, Bellway’s Sales Director, Maria Seed, said: “We need more financial products to help people move and buy new homes. The launch of NewBuy is a very welcome initiative that will increase the size of the housing market. Typically, buyers in the past have had to find a deposit of at least 10%, by reducing the size of the deposit to 5 per cent will mean more people will be able to apply for a mortgage.”
Research has shown first-time buyers who cannot raise a deposit from the “Bank of Mum and Dad” are continuing to struggle to get on the property ladder. According to the Council of Mortgage Lenders, only 36 per cent of first-time buyers were able to buy their homes without any financial help from family and friends in the third quarter of 2011. The average deposit required by someone buying a home without financial help is more than £26,000, double that needed in 2007, when 63 per cent of first-time buyers bought without any assistance.