A new housing buying scheme was launched today for first time buyers and home movers.

The NewBuy scheme aims to assist buyers who have a deposit of at least 5 per cent to buy a new build home. This is a smaller deposit than is normally required. The scheme will allow more borrowers to secure up to a 95 per cent Loan to Value mortgage on new build properties (houses and flats) from participating builders in England.

The NewBuy Guarantee scheme is forecast to help as many as 100,000 people buy a new-build home with a deposit of 5% or 10% rather than the 20% typically demanded by lenders.

The Government initiative is part of a package of measures unveiled last year aimed at kick-starting the flagging housing market as well as boosting the construction industry.

It was initially intended to help the first-time buyer portion of the market which shrunk back to a three-year low last autumn but the Government has widened the scheme to include home movers.

Developers would contribute 3.5% of the purchase price while the Government guarantees 5.5%. The scheme is available on new build flats and houses up to a maximum value of £500,000 in England only.

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