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95% Mortgage Scheme For Buyers And Developers

Could this boost the economy?

Written by . Published on March 12th 2012.

95% Mortgage Scheme For Buyers And Developers

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 at Maine Place at Moss Side 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.

The exact detail of where to apply and through whom should be revealed later today but in the North West it is likely to be Didsbury based Plumlife, the organisation that currently handles the various affordable housing deals.

And 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 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.

More info: plumlife.co.uk


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8 comments so far, continue the conversation, write a comment.

Duke FameMarch 12th 2012.

Can anyone recall how the banking crisis started?

AnonymousMarch 13th 2012.

Where the article says "The government is today set to launch..." what it means is

'major Conservative party benefactors, the House Builders Federation and their financial backers in the City have persuaded the government to introduce a ruse to prop up already vastly over inflated house prices, pushing more people into debt and into poorly designed, poorly located, undersized, overpriced, charmless rabbit hutches'.

AnonymousMarch 13th 2012.

Although having said that, the example scheme cited in the article, Maine Place in Moss Side is actually pretty good. But you would expect that given it was effectively procured by the public sector.

Duke FameMarch 13th 2012.

The obvious thing to do to ignite the property Market is to reduce the ridiculously high cap on housing benefit. This has inflated house prices and meant first timers can't get out if rental and into buying.

3 Responses: Reply To This...
tomegranateMarch 13th 2012.

How would that work? Reducing the cap would reduce rents? How would that happen with an chronic undersupply?

the Whalley RangerMarch 13th 2012.

There is no 'chronic undersupply'. This opinion is repeatedly talked up by the construction industry and property owners et al, but constant reiteration does not make it right.

What we have is an affordability problem, as Duke Fame has rightly noticed.

Does anyone remember pre-1995 days when a buyer actually had to have some savings to purchase a house?

When 20-year-olds expect to buy but have no assets, then there is something wrong with their aspirations and focus on the goal.

Save, then you will have.
Spend in pubs, then you will rent.

Duke FameMarch 13th 2012.

There is not a chronic under-supply, there are plenty moth-balled developments that simply haven’t got buyers.

Reducing the benefit cap will force rents down, we have a situation where private renters are forced to pay more as benefits are so generous, those on benefits can get a pretty nice place.

Forcing rents down will mean the rental market will deflate a little and vendors will be more willing to sell and lower their asking prices.

FelipesullivanNovember 11th 2013.

Truly for a secure long term return buy-to-let market is the perfect way. No matter what is going on in other sector, the property market will always remain on top. Among the most popular destinations in the world, this is the ideal place for real estate investment. According to a real estate report shown by www.Plazaestates.co.uk… property consultant firm, the prices of property have increased more than 14 per cent over the last year, which is reasonably higher than the average increase of 8.5 per cent in the previous year.

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