The UK government-backed NewBuy scheme is off to a successful start, according to the Council of Mortgage Lenders (CML).  The scheme has been assisting individuals who are in the market to move home for six months.  Acceptance by both lenders and builders continues to occur and support for the scheme continues to increase.  Consumers are becoming more aware of the ability to take advantage of the home buying initiative with decent figures to back it up.

The CML report on NewBuy carried a positive tone about the upcoming autumn buying season, saying: “With 1,300 reservations to date, NewBuy is well placed to expand further in this autumn’s home buying season. For individual households capable of sustaining monthly mortgage commitments but unable to afford a deposit, NewBuy provides valuable assistance, and the scheme has already fulfilled some of its key objectives. But it is also important to view it both in the longer term and a broader policy context.”

Home buyers who have taken advantage of the scheme are able to afford monthly payments for their chosen residence.  The primary area of aid from the scheme comes in the form of assistance on the front end of the home buying process.  Almost 60% of those purchasing through NewBuy are doing so by taking out mortgages with only a 5% deposit on the property.

The CML report continued with a synopsis of the success rate up to this point, saying: “At the outset, we said that NewBuy had the potential to fulfill three key objectives for the housing market. After six months, it is clear that the scheme has successfully achieved the first two of them. After only six months, it is still far too early to deliver a verdict on the third broad objective that we identified for NewBuy, an increase in the supply of new housing as builders respond to increased demand, and the creation of more jobs in the construction sector. This can only be an objective for the longer term, and it may be several years before we can judge the scale of the contribution from NewBuy.  But we have never suggested that NewBuy on its own is sufficient to kick-start the building sector.”