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NewBuy figures show gradual acceleration

Figures released today by the government show that 1,522 purchases had been completed up to 31 December 2012.

The figures show some acceleration in the scheme, which only attracted 253 completions in its first three months, between March and June 2012.

From July to September 2012, 376 purchases were completed, with a further 893 in the final quarter of the year.

The completions bring the total liability to which the government is exposed up to £9m.

However, the figures remain short of the department of Communities and Local Government’s target of 100,000 purchases, with a £1bn maximum liability.

Meanwhile, a Barratt/ComRes survey recently found that two-thirds of housebuyers were unaware of the scheme.

NewBuy is aimed at loosening up credit availability for purchasers of new-build homes, enabling them to get mortgages with five per cent deposits underwritten by the government.

Redrow chairman Steve Morgan said the scheme has produced a “strong benefit” in England, and had been a “real help to the market”.

“[The housing industry] needed a crutch and we’ve been given it – our strong message is please continue”.

And Bovis chief executive Dave Ritchie said that roughly ten per cent of the housebuilder’s sales were starting to come through NewBuy, which had brought new people into the market.

“[NewBuy] provides a more sustainable way of those people buying.”

Mortgage Advice Bureau new homes director Andy Frankish said: “Today’s NewBuy figures are certainly encouraging – but the real positive is that this is still just an early sign of the scheme’s potential growth over the next 12 months. 

“In the first two months of 2013, we have seen our new build activity almost double in volume, and NewBuy is becoming the product of choice for people seeking higher loan to value (LTV) purchases.  This has been boosted by the attractive rates in the market, and there are even better prospects with direct-only lenders planning to launch intermediary products.

“The fact that NewBuy can be used for part-exchanges means the scheme is now more viable for second-time buyers as well as new homeowners.  We expect to see the rate of completions increase every quarter this year – so today’s figures are only the start.”

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