The Government’s NewBuy scheme is now offering part-exchange deals to enable homeowners to take the next step on the property ladder.
The scheme already provides buyers with 95% mortgages on newly built properties. It means that instead of a typical buyer having to provide a deposit of £20,000 on a £100,000 home, which many lenders demand, they only have to provide £5,000.
Now the scheme is being extended so that buyers will be able to trade in their old property for a newly-built home.
The change came into effect on 25 January. Builders offering the NewBuy scheme can now buy the customer’s existing property before selling them a new home.
Housing Minister Mark Prisk said: “The NewBuy scheme is unique in the industry in that it not only supports aspiring homeowners, but also those looking to move up the property ladder.
“The part-exchange offer to second-steppers will help them make that move, getting the housing market moving and ensuring those looking to move to a bigger home more suited to their needs can do so.”
The NewBuy part-exchange service is available for the first 6 months of this year. It may be extended subject to demand.
Stewart Baseley, Executive Chairman of the Home Builders Federation, said: “NewBuy means people can buy a new home with a 5% deposit and is now a real option for those who thought they couldn’t get on to the property ladder.
“Allowing people to part-exchange their existing homes and buy a new one using NewBuy will also be a huge boost for those families stuck in their existing homes, unable to sell and without the required deposit to move.”
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