There is still low awareness of the government’s NewBuy scheme, six months after its announcement, according to a new report from Rightmove.
Rightmove’s research into the impact of NewBuy finds that while the government-backed scheme addresses many of the key issues facing those who feel disenfranchised from the property market, overall awareness and understanding of the scheme remains low.
In March, ahead of the launch of NewBuy, Rightmove found that awareness of the scheme was highest among first-time buyers, with 55% saying that they had heard of NewBuy. Six months on, new research finds that this figure has now increased to 66%.
However, among other home-movers 49% have heard of the scheme, up from 27% in Rightmove’s last survey. When respondents who stated they had heard of the scheme were asked if they fully understood NewBuy and how it could help them, only two thirds stated they did.
“Assisting first-time buyers to get onto the housing ladder is one of the key challenges in the current housing market, and so it is encouraging that two thirds of prospective first-time home-movers are familiar with NewBuy, and a further two thirds of that group understand the scheme,” said Alex Solomon, Rightmove’s new homes director.
“However, it is clear that there is still a job to do to raise awareness of the scheme among other home-movers.”
When looking at the single biggest concerns of those who feel disenfranchised from the market, Rightmove says it would appear that the ability to purchase with a 5% deposit through NewBuy would address their main concern. Raising enough of a deposit to buy is the most commonly expressed concern among respondents who stated ‘I don’t feel I am in a financial position to buy in the near future’ (43.6%) and ‘I would like to buy in the next 12 months but don’t feel I’m in a financial position to do so’ (39.4%).
Meanwhile, for those who state they either ‘will buy’ (44.8%) or are ‘interested in buying’ (45.4%) in the next 12 months, finding a property that they want to buy is their most common concern.
Solomon said: “It is clear from our research that raising enough of a deposit is the big issue facing those who don’t feel they are in a position to buy. The terms of the NewBuy scheme, allowing home- movers to purchase a property with a 5% deposit, go a long way towards tackling this issue.
“However, with 34% of first-time buyers and 51% of other home-movers unaware of the scheme, is a major opportunity to help those standing on the sidelines of the housing market being lost?”
The research also found that around three in 10 respondents who stated they would like to buy in the next 12 months but don’t feel in a financial position to do so, stated they felt ‘much more likely’ (6%) or ‘a bit more likely’ (25%) to buy over the next 12 months because of NewBuy. However, in both surveys carried out so far, 60% of general home movers stated they didn’t feel the scheme would make a difference to them as they don’t want to buy a new build property.
Solomon added: “Our experience of the new build property sector is that around half of those who purchase a new build home don’t set out to purchase one initially. Therefore there are perhaps two major communication challenges necessary to assist the NewBuy scheme. Raising general awareness among the home-moving public is the first.
“Second, home-movers need to fully understand the benefits of new build such that they can make a fully informed decision as to how best to get onto the housing ladder.”