1. ITV Report

Scheme to help 100,000 onto housing ladder

The NewBuy scheme aims to give a boost to the construction industry as well as the housing market Photo: Rui Vieira/PA Wire

The Government has launched a new initiative to help up to 100,000 people buy homes in new-build developments across England.

By easing the terms of mortgages, it hopes the NewBuy Guarantee scheme will breath new life into the housing market and construction industry.

Would-be homeowners will be able to secure mortgages with deposits of just 5 or 10 per cent of the value of the property, instead of the 20 per cent typically charged by mortgage-lenders.

The value of mortgages may also rise to 95 per cent of the value of the property, instead of the customary 80 per cent.

David Cameron said that homeowners form the basis of "strong families and stable communities". He added: "I want us to build more homes and I want more people to have the chance to own their own home."

The Government is expected to release the names of three high-street lenders and seven construction firms who have agreed to support the scheme.

Critics have argued that the scheme is heavily dependent on the goodwill of lenders agreeing to grant mortgages on more favourable terms.

The Government aims to make the deal more palatable by paying 3.5 per cent of the property cost itself, while property developers will cover a further 5.5 per cent.

It's no good hoping people will climb the property ladder if the bottom rung is missing. Affordable properties and available mortgages are vital. So we're working with leading housebuilders and lenders to get the scheme under way. It's a vital boost to the housing market, giving people good affordable new homes and backing thousands of jobs in construction in the process.

– David Cameron

The Government will also announce today a "reboot" of the right-to-buy scheme which allows council housing tenants to buy their homes.

Those who have five years' residency could receive a 35 per cent discount, with an extra one per cent for each added year. Tenants could receive discounts of up to £75,000.

The money raised from sales will go towards building more social housing.