The Government’s latest scheme to kick-start the housing sector, the New Build Indemnity Scheme, launches later this month. It offers mortgages of up to 95 per cent of the value of a home at “affordable rates”.
It will see Government act as a guarantor on up to 100,000 mortgages on new homes.
For each new build property sold, the housebuilder will contribute 3.5 per cent into an indemnity fund.
The Government will also pay a total of nine per cent of the property value. The scheme aims to reduce some of the risk to banks.
The indemnity fund only pays out to the bank or building society if a property is repossessed.