The NewBuy scheme allows you to buy a new build home with a 5% deposit. The scheme is backed by the Government and Home Builders Federation. The NewBuy scheme is available to first time buyers and existing home owners. The aim of the scheme is to allow people who only have a 5% - 10% deposit to buy a property.
The scheme enables people to get up to a 95% mortgage on a new build home. The government and homebuilders make a commitment to the lender that they will cover lenders for a limited amount of potential losses. This enables lenders to offer higher loan-to-value mortgages.
The price of the property can be up to £500,000, you will still need to achieve all the usual affordability checks. Not all new build properties are part of the scheme and you will have to check with the builder/developer whether the property is eligible for the scheme.
The property must be the only property you own and used as your main home. You cannot use the NewBuy scheme if the property is shared ownership or shared equity, it must be a straightforward purchase.