"The Government had hoped to assist 8,000 first home buyers a year through the scheme, but figures show only 1,629 loans have been approved since its launch in 2003,” Heatley says.
"This is a failure by any measure. The programme has been accompanied by an expensive advertising blitz, but even so - few people are opting in.
"The low-level of interest in the loans, coupled with the considerable level of bureaucracy that goes with it, means the Government must re-think its approach," Heatley says.
The Welcome Home Loan programme is based on a mortgage insurance scheme piloted through Kiwibank. Under it people can borrow most or all of the cost of a house.
The scheme, run by Housing Corporation, is available through Kiwibank, TSB, SBS, the Nelson Building Society, DBS Canterbury and some Credit Unions.
Housing Minister Chris Carter plans to expand the scheme, with new add-ons including an Equity Share Scheme and an increase in the number of low-interest loans and grants available through the Housing Innovation Fund.
