They will be able to trade their old property in for a new built home during the first six months of 2013, Housing Minister Mark Prisk announced today (25 January 2013).
Called the NewBuy part exchange’ it means that builders already offering the NewBuy scheme can offer to buy a customer’s existing property before selling them a newly built home with a 5% deposit.
Prisk said that this new measure would help free up the housing market, not just for these second-steppers, but also for aspiring first time buyers, as more properties are freed up to buy. It will address a key issue in the housing market, where existing home owners are struggling to sell their current property and so move up the chain.
It comes as the Home Builders Federation report that there have been 3,000 reservations made through the NewBuy scheme, which offers the opportunity to buy a newly built home with a fraction of the deposit that’s normally required.
‘The NewBuy scheme is unique in the industry in that it not only supports aspiring home owners, but also those looking to move up the property ladder. The part exchange offer to second steppers will help them make that move, getting the housing market moving and ensuring those looking to move to a bigger home more suited to their needs can do so,’ Prisk added.
Stewart Baseley, executive chairman of the Home Builders Federation, said there is a huge pent up demand for home ownership after years when large deposit requirements have prevented many people from buying their first home or trading up to a larger home.
‘NewBuy means people can buy a new home with a 5% deposit and is now a real option for those who thought they couldn’t get on to the property ladder. Allowing people to part exchange their existing homes and buy a new one using NewBuy will also be a huge boost for those families stuck in their existing homes, unable to sell and without the required deposit to move,’ he explained.
The figures from the Home Builders Federation show that the reservation rate in the first three weeks of 2013 is running at the highest levels since the scheme was launched last March. Well over a hundred people have reserved a new home each week, continuing the upward trajectory in the take up of the schemes.
At launch the scheme had seven builders and three lenders on board. There are now over 60 builders offering the scheme and six lenders and since the scheme began interest rates on NewBuy mortgages have dropped significantly, increasing the availability and appeal of the scheme to home buyers.
‘Over the coming years NewBuy will make a real difference and help tens of thousands of people realise their ambitions of home ownership. In turn this will then help kick start new home construction, creating economic growth and thousands of jobs across the country,’ added Baseley.
Prisk said that the figures clearly demonstrate the success of the NewBuy scheme in offering a valuable option to aspiring homeowners onto the property ladder with just a fraction of the deposit they would normally require.
‘And now, the new Part-Exchange deal will offer further help to people looking to make their next move, getting the housing market moving, and ensuring those looking to move to a home that better suits their needs, can do so,’ he added.