‘Newbuy is gaining momentum’

The Home Builders Federation says the Government’s NewBuy scheme is ”gaining momentum” as it hit 1,300 reservations since its launch six months ago.

The take-up rate is slightly higher than the 600 reservations made for the first three months of the scheme from March to June.

The HBF, which along with the Council of Mortgage Lenders developed NewBuy, says the scheme is really starting to take-off with 30 builders and six lenders now involved. Barclays, Halifax, Nat West, Santander and Nationwide already offer deals with Aldermore set to launch rates this week.

Under the scheme, announced in the Government’s housing strategy last November and launched in March, lenders offer 95 per cent LTV mortgages for new-build properties against a mortgage indemnity guarantee funded jointly by house builders and the Government.

Yesterday NewBuy came under fire from builders complaining that the take-up had been slow as Labour pledged to develop ideas for an “improved and more effective” scheme.

But HBF executive chairman Stewart Baseley says there is real momentum building with more builders and lenders coming on board.

He says: “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 per cent deposit.”

The Scottish and Welsh Government’s are developing their own versions of NewBuy in a bid to boost their housing markets.