From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

  1. Home
  2. News
  3. News & Views
  4. NewBuy sales total 2,300 in first year

NewBuy sales total 2,300 in first year

News

Published: 5 June 2013 | Author: Bernard Clarke

Almost 2,300 buyers in England have successfully purchased a home during the first full year of the NewBuy initiative, according to government data. Sales under the scheme are supported by a government guarantee of a maximum of 5.5% of the property’s value. But figures from the Department for Communities and Local Government (DCLG) show that, while the government’s potential liability under the scheme – the maximum possible cost to the state – is £23 million, the actual cost incurred so far by the government is zero.

Data published this week by the DCLG shows that there were just over 750 NewBuy purchases in the first quarter of this year. The scheme was launched in March 2012 and the data shows that there have been 2,291 sales during its first year, with more than 1,650 completed in the last two quarters.

Alongside this week’s numbers, the DCLG has also published a supplementary table of completions by postcode district, showing that NewBuy purchases have been spread across the country. The postcode with the most sales is for Dartford in Kent, where there have been 40 purchases.

The government could incur costs if a home sold under NewBuy is taken into possession and sold at a loss. Even then, there will be no cost to the government unless the loss on the sale exceeds the total of the builder’s corresponding indemnity fund. So, while the scheme may help only a relatively small number of home-buyers, it is unlikely that it will lead to significant costs for the government.

Table One: Quarterly and cumulative data for NewBuy up to 31 March 2013

Period Completions Maximum government liability £million Costs incurred £million
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 2,291 23.1m 0

 

Source: DCLG