NewBuy scheme key to sales, says developer MD
When I interviewed Kelvin Tuthill, managing director at David Wilson Homes South West, in January he told me focusing on first-time buyers was key for the property market.
Since then, we have had the launch of the NewBuy Guarantee scheme, which recently hit a milestone of 1,500 reservations.
The scheme, launched in March, is funded by developers and guaranteed by the Government. It allows the buyers of new build homes to get a 95 per cent mortgage.
But what is special about it is that, unlike the FirstBuy scheme, launched last year, it is open to all buyers. This includes families, who may be stuck in a home that is too small because they have only limited equity in it.
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Recent reservation figures were released by the Home Builders Federation and those involved in the NewBuy scheme predict activity will pick up further with the autumn selling season.
Kelvin said: "We usually get a pick up mid-September time when the kids go back to school. This is happening now. Enquiries have increased every week for the last three weeks (in the South West)."
David Wilson Homes have four developments underway and three to start next year in and around Gloucestershire. They include Cooper's Edge, Waterbrook Ways and Haresfield Chase in Gloucester.
Back in January, Kelvin said he expected the market to remain flat in 2012 and so far it has remained stable, he said. House prices have gone up two per cent in Gloucestershire in the last two to three months.
"NewBuy took over from FirstBuy. It offers an alternative to relying on building societies but we see mortgage lending improving over the next 12 months."
Developers put 3.5 per cent of the value of every NewBuy home sold into a pot that is used to protect the lender in the event of a default.
The scheme applies to new build homes in England up to a price of £500,000. At launch there were seven developers and four lenders on board. There are now more than 30 developers and six major lenders offering the scheme.