Government hopes to help up to 100,000 people move by 2015 but take-up rate has been low
Only 250 homes were bought through the government’s NewBuy scheme in the first four months since its launch in March, according to government figures. The government hoped it would help up to 100,000 people move by 2015. The initiative allows first-time buyers to get a 90-95% mortgage for a new-build home with the government and housebuilders sharing part of the risk to protect lenders against default on the mortgage.
A Department for Communities and Local Government spokesman said the average house sale takes up to six months. “As the Home Builders Federation have recently reported, 1,500 reservations have been made through NewBuy and at least 25,000 additional new homes will be built as a direct result of the scheme.”
The federation noted that just seven house builders and four mortgage lenders were signed up to the scheme in March, which has since risen to more than 30 developers and six lenders. Builders complained that mortgage rates were too high initially.
“People weren’t aware of it [NewBuy] – it’s a completely new scheme,” said HBF spokesman Steve Turner. “Take-up in the past few weeks has markedly increased, to about 100 reservations a week.” He said take-up had been similar to the previous government’s FirstBuy scheme, which was regarded as a success.
However, Jack Dromey, Labour’s shadow housing minister, was critical. “The government needs to drop the hype and change course by implementing a real plan for homes, jobs and growth. If it fails to do so, at this rate, it will take 200 years for NewBuy to help 100,000 homebuyers buy their own home.”
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