The Government-backed scheme aims to help people wanting to buy a home who haven’t got the large deposits that lenders have been requiring. It can be used by first time buyers or second steppers without enough equity in their current home to move on.
Take up of NewBuy has been broadly in line with the successful shared equity scheme FirstBuy, which itself was allocated more money last week by Government. However, with more developers now on board, and with all the lenders having recently dropped their NewBuy interest rates, take up of the scheme is expected to continue to increase.
90-95% mortgages were the norm for first-time buyers for nearly three decades before the economic crisis and subsequent credit crunch hit in 2007. Since then they have all but disappeared from the market, leaving many wannabe home buyers unable to realise their dream of home ownership.
The level of interest in NewBuy is demonstrated by the fact that the web site www.Newbuy.org.uk will this week have its 100,000th unique visitor. The Scottish and Welsh Governments are developing their own schemes and believe they will be equally as popular as NewBuy. MI New Home (www.minewhome.co.uk) will launch shortly in Scotland, whilst HBF is working with the Welsh Government to develop a scheme following its commitment to do so in a recent White Paper.
Speaking today, Stewart Baseley, Executive chairman at HBF, which proposed and developed the scheme with the Council of Mortgage Lenders, said; “We are now starting to gain some real momentum and with more and more builders and lenders coming on board are confident NewBuy will make a real difference.
“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% deposit. Many NewBuy first-time buyers had been trying to save a deposit while staying at home with their parents or living in rented accommodation. Other buyers have been home owners stuck in a house no longer big enough for their growing family. NewBuy is proving a real winner for them after such a frustrating time.”
Have your say on this story using the comment section below