As of June 30th just 250 first time buyers have successfully purchased homes with the help of the government's mortgage indemnity scheme NewBuy, which launched in March. This is well off the government's target of 100,000. Although the government has not set a deadline for this target, if the present rate persists it will take decades. The figure comes from the Department of Communities and Local Government.
Chris Cobbold, head of residential practice at consultancy DTZ, said: "It is no great surprise that only 250 home buyers have completed the purchase of their home using the Newbuy scheme, as it is still in its infancy."
"This is the normal pattern for new interventions in the housing market. It takes time for the lenders and house builders to get their systems in place, and for buyers to get their mind around whether this is a good deal."
The Home Builders Federation said: "These figures do not represent the current position and increasing popularity of Newbuy."
At the same time we still have lenders trying to pull back from property in a big way as new rules will soon force them to carry more capital against loans secured on property. Yes, they joined up to New Buy, but their rates have never really been what the government is selling, arguably showing a lack of commitment to the scheme.
That said, some believe the scheme will grow on the banks if it is successful. In that vein the CLG figures showing that the government has yet to pay out and claims to mortgage lenders for the guarantee scheme could inspire more commitment from the lenders.
- Monday 01 October 2012