First Time Buyer
1,300 loans reserved through NewBuy since March
The HBF last reported that reservations topped 600 in July; however the government has yet to publish statistics which reveal the number of completed NewBuy transactions.
The scheme enables lenders to offer mortgages for up to 95% of the value of a newly-built property, partially underwritten by guarantees provided both by the government and the builder of the new home. The scheme was launched with the aim of selling 100,000 new homes over the next three years.
At launch it had seven builders and four lenders on board. There are now over 30 builders selling homes using NewBuy, with Aldermore announcing last week that it would also be offering NewBuy mortgages.
Charles Haresnape, managing director of Aldermore Residential Mortgages, said: “We have launched the scheme, which is available to both first and subsequent time buyers, in conjunction with Fairview New Homes Limited which has developments located throughout the South and East of England. We’re offering borrowers a choice of a 2 or 3 year fixed rate at 5.48% and we’ll be rolling the scheme out with other property developers over the course of the coming weeks.”
The HBF said that take up of NewBuy has been broadly in line with the government’s FirstBuy Direct scheme, which is being extended by £280m.
NewBuy currently operates only in England. But there are moves underway to launch similar initiatives throughout the UK. The Council of Mortgage Lenders (CML) is working with the Scottish government and Homes for Scotland on a scheme similar to NewBuy called MI New Home. The Scottish scheme is expected to launch this month.
Meanwhile, the Welsh government has begun discussions with interested parties on a similar initiative, while exploratory discussions have also begun in Northern Ireland.
Stewart Baseley, executive chairman at HBF, which proposed and developed the scheme with the CML, said: “We are now starting to gain some real momentum and with more and more builders and lenders coming on board, we 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. Many NewBuy first-time buyers had been trying to save a deposit while staying at home with their parents or living in rented accommodation. Other buyers have been home owners stuck in a house no longer big enough for their growing family. NewBuy is proving a real winner for them after such a frustrating time.”