Comments : NewBuy Scheme flops & the influence of football on the property market
The NewBuy Scheme which was launched by the Government in March 2012 was designed to boost house sales by offering 95% loan to value mortgages to those purchasing newly built homes up to the value of £500,000.
This meant that anyone from first time buyers or prople who have already graced the steps of the property ladder could take advantage of this offer. For example, a typical buyer who wanted to purchase £200,000 property would pay a 5% deposit of £10,000 rather than a 20% deposit of £40,000 which would help people who would ‘otherwise be frozen out of the market’ according to Grant Shapps.
This all sounds wonderful, especially when the Government stated that the scheme would help around 100,000 people buy their ‘dream home’ and it would also ‘unblock’ the declining housing market.
However, the Newbuy Scheme has been active for 6 months and the figures are not so promising. According to one of the country’s largest house builder Persimmon, they have sold a mere 220 new homes under the Newbuy Scheme since it was launched. Another one of the UK’s largest house builders have also reported very low sales with just three or four houses sold per week under the NewBuy Scheme. The house builder Bovis also stated that it has sold a minute 70 homes under the scheme since it was launched in March.
So, what’s gone so wrong? Experts say that people were put off because of the high interest rates being offered by the NewBuy Scheme mortgage companies. The interest rates were around 5% which were unattractive to purchasers even though they would be paying a smaller deposit. Another expert believes that the reason why the NewBuy Scheme has suffered because of a lack of marketing and awareness among the public as only the housing developers are actually marketing the scheme.
A Department for Communities and Local Government commented on the latest findings and stated that they were happy with the schemes progress in the first 6 months and that the Home Federation reported around 600 reservations on their houses and are expecting more sales to complete in the coming months.
However, it seems that house builders need to find plots of land near football stadiums to get the optimum level of house sales according to the latest report by Halifax. Halifax researched the property prices around the 20 Premier League football club stadiums and discovered that the value of these properties have increased by 137% over the last 10 years from an average of £152,891 in 2002 to £362,866 in 2012!
In comparison, the average house prices in England and Wales have risen 90% during the same period from £121,129 to £229,735! More evidence of how much we love houses near football stadiums is the fact that the average house prices near football stadiums have risen 1.2% over the last year where as house prices across England and Wales have fallen 2.7%.
The most expensive Premier League postal districts are Fulham and Chelsea in London where the average house price is just under £750,000 and the cheapest Premier League postal district can be found around the stadiums of Liverpool and Everton where the average house price is £63,473.
Would you want to live near a football stadium? It’s not my cup of tea to have hordes of supporters stampeding through my street for 9 months of the year, singing and chanting their songs. Have you heard of the NewBuy Scheme before reading this article and would you be interested in purchasing a newly built home under the scheme?
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