The government-backed NewBuy Guarantee Scheme launches today with three lenders and seven housebuilders participating in the scheme.
Barclays, Nationwide and NatWest are the first lenders to offer NewBuy mortgages in association with housebuilders although Halifax and Santander are working on it.
The government originally said seven lenders and 25 house builders had agreed ‘in principal’ to be involved in the scheme.
This scheme allows borrowers with just a 5 per cent deposit to buy a new build property in England and is open to both first-time buyers and house movers.
The government and housebuilders will help provide security for the loan, so if the house is subsequently sold for less than the outstanding mortgage total the lender will be able to recover its loss.