Minister for Housing and Regeneration, Carl Sargeant, has announced that the Welsh Government’s flagship mortgage guarantee scheme will be launched on June 3.
NewBuy Cymru will enable home buyers to access high loan-to-value mortgages and will be open to all home buyers purchasing new build houses or flats up to the value of £250,000 with a 5% deposit.
It’s anticipated that the scheme, widely welcomed by the housing sector, will support the delivery of up to 3,000 additional homes across Wales, providing a boost to the construction industry.
Carl Sargeant said: “NewBuy Cymru is not only good news for the Welsh economy but good news for families and individuals across Wales.
“We are all aware of the difficulties that people are having in either buying their first home or moving up the housing ladder. NewBuy Cymru will provide a helping hand in the shape of a mortgage guarantee to people that have been saving hard to put down a deposit for a new home.
“By helping to kick-start the housing sector it’s hoped that NewBuy Cymru will help tackle poverty and provide a welcome short in the arm to our economy.
“I would urge people to sign up to this great scheme and look forward to officially launching it in June.”
Executive Chairman of the Home Builders Federation, Stewart Baseley added: “It is fantastic news for Wales that NewBuy is being launched. In recent years many people in Wales have been unable to buy a home because of the large deposits required to secure a mortgage. NewBuy will allow people to buy with a more realistic 5% deposit and so realise their dream of home ownership. Opening up the market will also allow builders to build more homes, so creating jobs and providing Wales with an economic boost.”
Paul Smee, Director General of the Council of Mortgage Lenders, said: “There are many creditworthy borrowers who would like to buy a home but feel constrained by the difficulty in saving for a substantial deposit. NewBuy Cymru is a win/win, improving the ability of this group to buy a new property, while offsetting much of the increased risk for lenders that goes with lending to those without substantial equity.”
For every £1 spent on building houses it’s estimated that £1.40 will be generated in gross output across the economy as a whole.