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Govt-backed NewBuy scheme completions drop 17%

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04/06/2013
Fewer than 800 people bought homes under NewBuy in the first three months of 2013 as the pace of completions slowed, Government statistics have revealed.

Completions between January and March 2013 were 17% lower than in the previous three months. However, activity in the last six months still represents nearly three-quarters of completions under the government-backed scheme and brings the total number to 2,291.

Legal & General Mortgage Club managing director Ben Thompson said: “The UK is in dire need of a greater supply of affordable housing to meet ever increasing demand, and NewBuy, along with other Government stimulus measures, has been a laudable step in the right direction in meeting this need.

“While many have pointed out that too much stimulus may cause artificial house price inflation in London and the south-east the truth is that many areas of the country are still very much in need of schemes like NewBuy to get things back on track and to help many first time buyers achieve their ambition of home ownership.”

London and Home Counties postcodes saw the greatest number of completions, with 40 in Dartford, Kent and 27 in one area of Hampshire. Gateshead was the only area outside of the South East to see 20 or more completions.

The government’s liability under the scheme has reached £23.1m. However, so far with no defaults, it has not had to pay out any cash. Costs could be incurred if the NewBuy properties were repossessed and sold at a loss, and the total loss was in excess of the relevant builder’s indemnity fund.

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