New buy hitting sweet spot for first timers
Some improved results from the government as the NewBuy scheme seems to be hitting the sweet spot with first time buyers.
The scheme, designed to stimulate house building by giving a helping hand to first time buyers with smaller deposits, started out six month ago with seven builders and four lenders on board.
Despite warnings that interest rates for NewBuy were too high more than 30 builders are selling homes using NewBuy and this week a sixth lender, Aldermore, set up NewBuy mortgages.
Take up of NewBuy has been broadly in line with the successful shared equity scheme FirstBuy, which itself was allocated more cash last week by Government.
The Scottish and Welsh Governments are now developing their own versions of NewBuy.
Stewart Baseley, Executive chairman at HBF, which proposed and developed the scheme with the Council of Mortgage Lenders, 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.”
NewBuy protects lenders against losses arising from default. It is paid for by house builders and guaranteed by Government.