Newbuy: A subsidy scheme for house-builders?

The government's 'Newbuy' scheme - aimed at helping first-time buyers get on the property ladder - is more likely to help housebuilders than housebuyers, says Piper Terrett.

The government has launched a new scheme 'Newbuy' to help first-time buyers get on the property ladder.

Since the credit crunch, most buyers of newbuilds have only been able to borrow a maximum of 80% of the purchase price. Under the Newbuy scheme, the taxpayer guarantees part of the buyer's mortgage, enabling those buying new-build homes to borrow up to 95% of the property's value, with a maximum loan of £500,000.

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Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism. 

She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books.