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NewBuy scheme helps 1,300 first time buyers

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by Jan Harris
NewBuy scheme helps 1,300 first time buyers

The Government’s NewBuy scheme, which was launched in March, has already helped 1,300 first-time buyers onto the property ladder according to the Home Builders Federation (HBF).

NewBuy was launched in an effort to increase activity in the first-time buyer market and to help the country’s ailing house building sector.

The scheme, which was developed by the HBF and the Council of Mortgage Lenders, offers first-time buyers 95 per cent loan-to-value mortgages on new build properties valued up to £500,000.

It is supported by a government- and industry-funded indemnity mortgage guarantee which protects lenders against losses arising from default.

Initially just seven house builders and four lenders participated in the scheme but, six months on, this has grown to 30 builders and six lenders.

The latest lender to offer NewBuy mortgages is Aldermore.

Stewart Baseley, Executive chairman at HBF, said: “We are now starting to gain some real momentum and with more and more builders and lenders coming on board are confident NewBuy will make a real difference.

“We know people want to buy, but many have been thwarted by the current large deposit requirements.

NewBuy is proving a lifeline for people as it allows them to buy their dream home with a 5% deposit.”

One house builder which seems to be reaping the benefits of the scheme is Barratt Homes which has seen its shares soar by 82 per cent this year.

In July it said it expected full-year pre-tax profits to rise 158 per cent to £110 million.

Other house-builders participating in NewBuy include Stewart Milne Homes, Taylor Wimpey, Redrow, Bovis Homes, Persimmon, and Bellway.

NewBuy is only available in England, but similar schemes to NewBuy are being developed in Scotland and Wales.

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News posted: September 10, 2012

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