First-time buyers to benefit from NewBuy MIG scheme.

The Government's NewBuy MIG scheme has been launched to give first-time property buyers with a minimum 5 % deposit, easier access to mortgages.

Nationwide, Barclays and NatWest have all signed up to the NewBuy mortgage indemnity guarantee scheme and have launched various low rate offers priced to help first-time property buyers.

The aim of the NewBuy MIG scheme is to help around 100,000 would be home-owners who would otherwise be frozen out of the housing market. The scheme has also been created to support around 50,000 construction jobs.

Housing developers will guarantee lenders 3.5 % of the property purchase price of a new build home and the government will provide an additional 5.5 % guarantee.

The guarantee totaling 9 % will allow those lenders signed up, to offer larger mortgage deals without taking on risk. If the property goes into negative equity and is repossessed, the guarantee will be used to cover the lender's loss.

A recent Rightmove survey advised that 38 % of first-time property buyers believe that with the NewBuy MIG scheme they are more likely to be able buy within a year. Housing minister, Grant Shapps has advised that around 28,000 home-buyers have registered their interest in the NewBuy scheme since it was announced in February 2011.

Katy John of the pressure group PricedOut commented on the scheme saying that while it is true Grant Shapps' main objective with the NewBuy MIG scheme is to get mortgage providers lending more to first-time buyers, it is also true to say that if builders are unable to sell properties they should drop their price to a more affordable level.