First Time Buyer scheme up and running with three lenders confirmed

Published: 14/03/2012

Despite anticipated delays, the Government’s first time buyer initiative, NewBuy, launched this week with Nationwide, Barclays and NatWest all now offering 95 per cent loan to value (LTV) products under the scheme.

Santander and Halifax are also expected to confirm its NewBuy range of mortgages in coming months.

NatWest is currently offering the most competitive rates; a two-year fixed rate up to 95 per cent LTV at 4.29 per cent and a five year fixed rate up to 95 per cent LTV at 4.99 per cent. Both have a £499 fee.

Barclays has confirmed two NewBuy deals; a two-year fixed rate mortgage at 4.99 per cent and a four-year fixed rate at 5.89 per cent (plus a £499 application fee). Nationwide also launched two products for the first time buyers programme; a three and a five year rate at 5.69 per cent and 5.99 per cent respectively with a £900 product fee and £99 booking fee. Nationwide are also offering fee free options at 5.99 per cent and 6.19 per cent.

While Barclays have confirmed its range will be offered principally through IFAs, Nationwide’s products will only be able available through intermediaries initially.

The NewBuy Government scheme allows lenders to offer larger loan-to-value mortgages on new-build homes with the associated risk mitigated through an indemnity guarantee financed by property developers and the Government.

Experts are hopeful the scheme, which is available on selected new build homes only (Barclays and Nationwide deals available on Barrett, Bellway, Bovis, Persimmon, Redrow and Taylor Wimpey properties and NatWest products applicable for these six builders and Linden Homes), will boost the property market and help 100,000 first time buyers find a firm footing on the ladder. Paul Smee is the Director General of the Council of Mortgage Lenders (CML):

“NewBuy mortgages will help creditworthy borrowers who simply haven’t yet managed to build up a large enough deposit to gain access to finance to buy a newly built home.

“NewBuy is good news for home-buyers, and potentially good news for jobs and the wider economy too. Borrowers need to understand the implications of high loan-to-value borrowing, so we will be supporting the initiative with clear consumer information to help people decide whether NewBuy borrowing is an attractive option for them.”¹

¹Mortgage Solutions (March 2012)

Content correct at time of publication