Halifax joins NewBuy Scheme

Halifax is the latest lender to join the NewBuy scheme which was launched last month.  It will offer two mortgages to those to wish to use NewBuy to purchase a new build house, and who have a deposit of between 5 and 10%.
NewBuy is open to those people who wish to buy a new build property in England up to £500,000, as long as the developer has joined the scheme.  The purchaser must be buying the property as their main home, but NewBuy is open to first time buyers and those wishing to move house.  
Borrowers who wish to use the Halifax for this scheme have the choice of two fixed-rate mortgages, both for two years.  The first option is a two year fixed rate of 5.99%, and a £999 setup fee.  The second option is a two year fixed rate of 6.39% with no setup fee.  The products are available in branches, and also through selected mortgage brokers.
Halifax has signed with 12 builders so far.  These are Barratt, Bellway, Bovis, CALA, Charles Church, Crest Nicholson, David Wilson, Linden, Persimmon, Redrow, Taylor Wimpey, and Ward.   
When a property is purchased using the Newbuy scheme, the developer pays 3.5% of the purchase price into an indemnity fund.  The government provides a guarantee of 5.5% of the purchase price.  If a lender later tries to repossess the property but cannot recover all of the money borrowed, it can use the indemnity fund, or use the government guarantee to retrieve some of the money owed.  
Santander is expected to join the scheme also in the next few weeks.  This will be joining Nationwide, Natwest and Barclays, who already offer mortgages as part of NewBuy.  
Any scheme which aims to kickstart the housing market is good, but this will remain limited as it only covers new build properties.  Also, buyers are limited to the developers who have been accepted by the lenders.  However, as more lenders join NewBuy, it can only increase the possible effect on the market.
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