Some 400 properties have been reserved through the government’s NewBuy Guarantee scheme since it launched just over two months ago, figures from the Home Builders Federation show.
Critics have been quick to attack the figure, saying 400 reservations is inadequate and that the government will fall short of its target of 100,000 NewBuy sales in the next three years.
But Andy Frankish, director of new homes at Mortgage Talk, which is part of Mortgage Advice Bureau, says he cannot understand why people want to criticise the product.
He says the mortgage market is in danger of talking itself out of what is a good scheme before it has got a chance to make an impact.
He adds: “The expectation of 100,000 sales is probably unrealistic, but if we were to help even 50% of this target in the next three years, it will have been a success in my opinion.”
Although the scheme launched in mid-March, only three lenders initially signed up to it – Nationwide, NatWest and Barclays.
It was not until earlier this month that Halifax and Santander also released products.
Frankish adds: “NewBuy was never designed to be the answer to everyone’s problems, but as a product in a portfolio of schemes such as shared equity, it gives customers more options and that’s got to be good for the housing and mortgage markets.”
Stewart Baseley, executive chairman of the HBF, says reaching 400 NewBuy reservations within weeks of its launch is a fantastic start.
He says: “These figures make us confident that the scheme will deliver tens of thousands of sales over the coming years.
“As recent statistics show, we have an acute housing delivery problem in the UK. By enabling buyers to purchase a new home, NewBuy will kick-start new home construction, creating economic growth and thousands of jobs across the country.”
Under the scheme, announced in the government’s housing strategy last November, lenders offer 95% LTV mortgages for new-build properties against a mortgage indemnity guarantee funded jointly by builders and the government.