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NewBuy is welcome step despite its flaws

The government launched its NewBuy scheme to help fund the deposit gap recently, with arguably muted fanfare.

Some have been quick to criticise the initiative as a sticking plaster for a broken leg, but with the public purse remaining in a perilous state, room for manoeuvre is pretty limited.

Positively, a number of lenders have already announced NewBuy products and I predict a few more big names will join the party soon.

Any boost to the new-build sector must be welcomed as it continues to recover from a battering.

There are now some more positive indicators.In 2010, you were three times more likely to be repossessed in a new-build property than a second-hand one. This reflected the surplus of investor units that were built and bought at the wrong time.

Today the trend has reversed, with danger of repossession now at least five times lower for those who have bought a house built since 2010 than for those in a second-hand property of any age.

To be fair, in both cases actual repossession numbers were a small proportion of overall stock.

New-build property comes with a number of built-in advantages, such as energy efficiency and lower repair costs – exactly what cash strapped first-time buyers, who the NewBuy scheme is aimed at, need.

So while we can acknowledge this is not a complete solution, let’s celebrate it as a much-needed positive step.

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