The controversial NewBuy scheme has added a part-exchange feature to its offering after reaching 3,000 reservations.
The scheme, launched last March, allows first-time buyers and home movers to buy a new-build property with a 95% mortgage, where a guarantee to lenders, should they have to repossess a home bought under the scheme and sell it at a loss, is jointly underwritten by taxpayers and developers.
New figures from the Home Builders Federation show that the reservation rate in the first three weeks of 2013 is running at the highest levels since the scheme was launched last March.
Well over a hundred people have reserved a new home each week under the scheme, says the HBF, bringing total reservations to 3,000.
At launch the scheme had seven builders and three lenders on board. There are now over 60 builders offering the scheme and six lenders.
Housing minister Mark Prisk officially launched NewBuy Part Exchange on Thursday.
It means that home movers with only a 5% deposit will now be able to use part-exchange in order to buy a new-build property worth up to £500,000.
Stewart Baseley, executive chairman of HBF, one of the organisations which developed the NewBuy scheme, said: “We know that there is a huge pent-up demand for home ownership after years when large deposit requirements have prevented many people from buying their first home or trading up to a larger home.
“NewBuy means people can buy a new home with a 5% deposit and is now a real option for those who thought they couldn’t get on to the property ladder.
“Allowing people to part-exchange their existing homes and buy a new one using NewBuy will also be a huge boost for those families stuck in their existing homes, unable to sell and without the required deposit to move.
“Over the coming years NewBuy will make a real difference and help tens of thousands of people realise their ambitions of home ownership.
“In turn this will then help kick-start new home construction, creating economic growth and thousands of jobs across the country.”
Prisk said: “Today’s figures clearly demonstrate the success of the NewBuy scheme in offering a valuable option to aspiring home owners on to the property ladder with just a fraction of the deposit they would normally require.
“And now, the new Part-Exchange deal will offer further help to people looking to make their next move, getting the housing market moving, and ensuring those looking to move to a home that better suits their needs, can do so.”
Comments
Yes its con no one should sign up to one of these part ex deals. Yet again the government pander to the housebuilder mafia.
HBF have been doing a sterling job developing the NewBuild scheme, but if Housing Minister Mark Prisk seriously thinks part exchange is going to be welcomed with open arms, he needs to lead an inquiry into looking at how part exchange valuations work.
Those of us who undertake valuations on behalf of builders are encouraged to give "forced sale" valuations based on guaranteed sale of the property within a month which in this market often means at least 15% below realistic market value and then the builders offer less than this figure in part exchange. Savings wiped out at a stroke!