There were 754 completions through the Government’s NewBuy scheme in the first quarter, down 17 per cent from 908 in the three months to 31 December, bringing total completions since launch in March 2012 to 2,291.
Figures released today by the Department for Communities and Local Government show the cumulative total of the Government’s maximum liability at 31 March stood at £23.1m, although it has not incurred any costs.
The postcode area with the most completions is DA1, in Dartford, where there have been 40 completions since the scheme launched in March 2012.
Legal & General Mortgage Club managing director Ben Thompson says: “The UK is in dire need of a greater supply of affordable housing to meet ever increasing demand, and NewBuy, along with other Government stimulus measures, has been a laudable step in the right direction in meeting this need.”
The NewBuy scheme will allow buyers with a 5 per cent deposit to purchase a new-build property worth up to £500,000. Housebuilders will deposit 3.5 per cent of the sale price for each home in an indemnity fund and the Government will provide additional security of 5.5 per cent.
The builder’s contribution will be held by the lender for seven years and interest will be payable on it. Funds will be returned to the developer after the seven year period minus a portion of any losses on the loans in the scheme.
The scheme has the capacity to help 100,000 borrowers purchase a new-build home, although experts suggest it may help around 25,000 to 30,000 homeowners by the time the scheme draws to a close in March 2015.
In this year’s Budget, the Government went further in its attempt to stimulate the housing market with the launch of Help to Buy. It consists of a £3.5bn shared equity scheme and a mortgage indemnity scheme – first tipped by Money Marketing’s sister title Mortgage Strategy in February – that has the potential to support £130bn worth of mortgage lending, building on FirstBuy and NewBuy, respectively.
Quarterly and cumulative data for England up to 31 March 2013:
|Period||Completions|| Maximum Government Liability
|12 March – 30 June 2012||253||2.6m||0|
|1 July – 30 September 2012||376||3.8m||0|
|1 October – 31 December 2012||908||9.1m||0|
|1 January – 31 March 2013||754||7.6m||0|
Cumulative total to 31 March