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NewBuy in England (closed)

This content applies to England

How the NewBuy scheme worked.

The NewBuy home ownership scheme was launched in March 2012 but is now closed to new applicants. It helped home buyers who had a deposit of five per cent or more to buy a new-build home on an outright ownership basis. The scheme allowed borrowers to secure a mortgage of up to 95 per cent on new-build properties from participating builders in England. A similar scheme that is currently open to applicants is the Help to Buy equity loan scheme.

How the scheme worked

The scheme allowed home buyers to access up to 95 per cent loan-to-value mortgages, which would otherwise have been unavailable, by offering mortgage indemnity to lenders. The indemnity provided additional security for the lender, protecting them from losses in the event that the borrower defaulted on their repayments and the lender had to repossess and sell the property for less than its original value.

The home builder or developer put aside a proportion (3.5 per cent) of the sale price of a property into a special indemnity fund for each house or flat sold through the scheme. The Government provided additional security for the loan in the form of a 5.5 per cent guarantee. In the event of repossession, the lender was able to recover any losses on the mortgages to the maximum covered by the home builder’s fund and then call on the Government guaranteed to an agreed level.

All mortgage lenders and house builders operating in England were eligible join the scheme, including those who were not members of the Council of Mortgage Lenders or Home Builders Federation (who developed the scheme jointly).

Who could apply

All home buyers could access NewBuy, subject to lenders' standard affordability and underwriting checks. Lenders assessed borrowers in the usual way. In addition, the following eligibility criteria had to be met:

  • the property being bought had to be residential, new build (being sold for the first time in its current form), in England, and constructed by a builder who is participating in the scheme
  • the price of the property had to be no more than £500,000
  • it had to be a standard full-ownership purchase (ie not shared equity or shared ownership)
  • the property had to be the applicants' main home (ie not a second home or a buy-to-let investment)
  • applicants had to be UK citizens, or have indefinite leave to remain in the UK
  • NewBuy was not available in conjunction with any other publicly funded mortgage scheme
  • the mortgage had to be a capital-repayment mortgage (ie not interest only). Individual lenders could also add their own additional eligibility criteria.


To check if they were eligible for the scheme, home buyers could either visit a participating new-build development or mortgage lender, or could approach a mortgage intermediary.

Once the buyer has found a suitable home, they would contact an independent financial advisor or a mortgage lender participating in the scheme. Borrowers had to meet lenders’ standard affordability and credit criteria to be eligible.

For more information about the process of purchasing a property and mortgages, visit the section on Buying a home.

Repossession and borrower liability

The existence of the indemnity scheme did not provide any additional financial protection for the home buyer/borrower and did not protect them from repossession. It did not cover the borrower against negative equity of a shortfall between the sale price and the outstanding debt.

In the event that a borrower was unable to maintain her/his mortgage repayments, her/his home would be repossessed by the lender and sold to cover the repayment of the outstanding loan. The borrower would be responsible for repaying any shortfall between the sale price of the repossessed property and the outstanding mortgage debt. This is the same as for any mortgage outside the scheme.

Options for addressing mortgage payment problems are discussed in detail in the section Mortgage arrears: payment problems. For information on repossession and court possession procedures visit the section on Mortgage arrears: court action.

Further information on NewBuy

Further information about the scheme is available from NewBuy and from .


The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

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