Further fall in housing starts demonstrates why scheme is vital for home buyers and industry
New figures released today by the Home Builders Federation reveal that 400 people have reserved new homes through the NewBuy scheme since its launch just nine weeks ago.
With the home-buying process taking some weeks these figures reveal a remarkable start for a scheme only introduced on 12th March and expected to deliver tens of thousands of sales over the next three years.
This milestone is announced on the day that official statistics reveal a 15% drop in housing starts in Q1 of this year compared to Q1 of 2011 to just 24,140. At a time when we are already building fewer homes than since the 1920’s, and fewer than half those required to meet housing need, the figures further emphasise the value of Newbuy to home buyers, the industry and the economy
Around 60,000 starts per quarter are needed to meet housing demand. The country is facing an acute housing crisis, with millions on social housing waiting lists and first time buyers unable to buy, largely because they can’t afford the deposit required to secure a mortgage.
NewBuy, an industry funded Government backed mortgage indemnity scheme, allows buyers to secure their new build home with a 5% deposit. Since its launch in March, the number of builders and lenders registering for NewBuy has steadily increased, with the fifth lender, Santander launching its NewBuy product just this week.
Stewart Baseley, Executive Chairman of HBF, who were part of the team that developed the NewBuy scheme said today;
“Reaching 400 NewBuy reservations within weeks of its launch is a fantastic start and clearly demonstrates the customer demand for this vital scheme. These figures make us very confident that the scheme will deliver tens of thousands of sales over the coming years.
“As today’s house building statistics show, we have an acute housing delivery problem. By enabling home buyers to purchase a new home, NewBuy will kick-start new home construction, creating economic growth and thousands of jobs across the country.”
No of builders registered; 13 (8 more expected to be offering NewBuy very shortly with a number more currently going through the registration process)No of lenders registered; 5No of reservations; C400 (based on 9 weeks stats).
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Notes to Editors:
The Home Builders Federation (HBF) is the principal representative body for private sector home builders and voice of the home building industry in England and Wales. HBF member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk
Permissions for fewer than 34,000 new homes were approved in Q1 in England, compared with 40,000 in Q1 2010 and against a quarterly housing requirement of nearly 60,000 based on the Government’s household projections. In Q1 2006 over 60,000 permissions were granted by local authorities 1.8 million families (5 million people) are currently on Local Authority waiting lists in England.FTBs aged between 22 and 29 have to save 45% of their take home pay every month for five years to afford a depositThe number of households is projected to grow from 21.7m in 2008 to 27.5m in 2033, a rise of 5.8m (27%), or 232,000 per year. (DCLG Household Formation Projections.)Jobs Calculator:Each home built creates 1.5 full-time jobs -Michael Ball reportIncreasing house-building by 130,000 units per year (to Government household projection levels) would create 195,000 jobs.HBF estimates twice that number of jobs are created in the supply chain – close to 400,000 jobs.Over the last three years, home builders have invested almost £1billion in shared equity schemes to help maintain housing construction whilst helping close to 30,000 first time buyers get a foot on the ladder.HBF’s Housing Market Report (May’11) shows that 91% of house builders now see the lack of mortgage availability as a ‘major constraint;’ on their ability to sell, and thus build, homesAccording to Government figures, even in its current crisis state, housing supply accounts for around 3% of UK GDP and provides between 1 and 1.25 million jobs in the UK.In February, Local Authorities learnt for the first time how much they will receive from developing. Some will gain over £4M in New Homes Bonus whilst others will receive nothing. The figures also show that some Local Authorities will in future be missing out on up to £27M a year by scrapping previous plans for homes or not building enough to meet the needs of their communities.The number of new homes completed in England in 2010 slumped 13% on the previous year – itself the lowest peacetime number on record since 1923.18% of females and 29% males aged 20-34 still live with parents – ONS social trends Or; Over 1 million women and 1.7 million men aged between 20 and 34 are still living at homeThe average age of a first time buyer (FTB) purchasing a home without financial assistance is now 37. (CML the original source of this have backtracked somewhat on it, but everyone, including Shapps now take it as read. However, may be best to avoid as gives ammunition to people if we quoting incorrect stats.)Whilst over 80% of people believe Britain needs more homes, particularly for first time buyers, only 50% of people would welcome more homes in their area - NHMB survey, Nov 2010.