Deposit boost for housing market

Offering hope to a new generation of prospective home-owners unable to land a mortgage, the housing minister, Grant Shapps, has announced that three high street lenders and seven of the country’s biggest building firms are to offer mortgages on newly-built properties to people with just a five per cent deposit, as part of the NewBuy scheme.
Nationwide Building Society, NatWest and Barclays have already signed up, with more expected to follow.
The announcement means that instead of a typical buyer requiring a £40,000 deposit for £200,000 property, they will now only need £10,000.
Security for the loan will be provided by the Government and house builders, so if the house is then sold for less than the outstanding mortgage total, the lender will be able to recover its loss.
Mr Shapps has also released details of a revamped ‘right-to-buy’ scheme that will give social housing tenants in West Berkshire the opportunity to buy their homes with a discount of up to £16,000 and, for the first time, ensure that any properties sold are replaced with new affordable homes for rent.
According to the homeless charity Shelter, there are 4,852 households on the social housing waiting list in West Berkshire, and a lack of affordable homes has long been a problem in the area.
West Berkshire Council will be able to sign an agreement with the Government for using the receipts from sales to build new affordable homes in its area.
The receipts will only need to meet 30 per cent of the costs, mirroring the funding model used for the affordable homes programme.
As people begin to move, it is hoped the scheme will jumpstart the stalled housing market and ensure that more properties become available to buy.
The Government believes that the increased demand for new homes will also boost the economy, and see thousands of workers return to building sites across the country.
Do you live in or have you sold a new-build property recently? Newburytoday.co.uk would like to hear about your experience.
Email mark.taylor@newbury news.co.uk or telephone (01635) 564532.