New figures released by the Home Builders Federation (HBF) have revealed a substantial increase in the number of reservations being made through the Government backed NewBuy scheme. The reservation rate in the first three weeks of 2013 is running at the highest levels since the scheme was launched in March 2012. Well over a hundred people have reserved a new home each week with 3000 people in total having now reserved a home using the scheme.
NewBuy, the industry funded Government backed mortgage indemnity scheme, allows buyers to secure a new build home with only a 5% deposit. At launch the scheme had seven builders and three lenders on board. There are now more than 60 builders offering the scheme and six lenders and since the scheme began interest rates on NewBuy mortgages have dropped significantly. This has increased the availability and appeal of the scheme to home buyers.
To add to this good news, Housing Minister Mark Prisk officially launch Newbuy Part Exchange. Many NewBuy builders will now be able to offer to buy a customer's existing home, in advance of selling them a new home using NewBuy. Part exchange alongside a 5% deposit will address one of the major blockages in the housing market that has seen existing home owners unable to sell their home in a stagnant market. With little equity in their home, they are struggling to move up the ladder
Stewart Baseley, Executive Chairman of HBF, one of the organisations which developed the NewBuy scheme says: "We know that there is a huge pent up demand for home ownership after years when large deposit requirements have prevented many people from buying their first home or trading up to a larger home.
"NewBuy means people can buy a new home with a 5% deposit and is now a real option for those who thought they couldn't get on to the property ladder.
"Allowing people to part exchange their existing homes and buy a new one using NewBuy will also be a huge boost for those families stuck in their existing homes, unable to sell and without the required deposit to move".
"Over the coming years NewBuy will make a real difference and help tens of thousands of people realise their ambitions of home ownership.
"In turn this will then help kick-start new home construction, creating economic growth and thousands of jobs across the country."
Housing Minister Mark Prisk says: "These figures clearly demonstrate the success of the NewBuy scheme in offering a valuable option to aspiring homeowners onto the property ladder with just a fraction of the deposit they would normally require.
"And now, the new Part-Exchange deal will offer further help to people looking to make their next move, getting the housing market moving, and ensuring those looking to move to a home that better suits their needs, can do so".
Leading UK housebuilder Persimmon Homes today welcomed a New Year surge in NewBuy reservations and says it expects the rise to continue as more people become aware of the Government-backed scheme.
David Thornton, Persimmon's group operations director, is responsible nationally for the housebuilder's sales and marketing. He says: "In the first few weeks of the New Year we have taken 82 reservations with the NewBuy scheme. The additional benefit of being able to offer part exchange too should see these numbers increase further."
Divisional Managing Director for Linden Homes Tom Nicholson says: "Our teams around the country have been particularly enthused by the NewBuy scheme which so often gives those who have worked hard to save, a chance to get their foot on the ladder. Those battling to get that vital deposit together find the required five per cent much more attainable."