The Government’s much-vaunted NewBuy scheme, intended to help first-time buyers and others purchase new homes with a taxpayer-backed 95% mortgage, is in disarray.
The claim has come from the head of the Home Builders Federation, Stewart Baseley.
He said there was a ‘far from satisfactory’ launch earlier this month, when only three lenders were ready with mortgage products to support the scheme. Although some lenders, including Santander and Halifax, said they hoped to launch products soon, others said they wanted no part in the scheme.
The HBF has revealed it has been in crisis talks with the Council of Mortgage Lenders.
Not all developers are participating in the scheme, but the HBF says it handed over to the CML a list of 130 builders that had flagged up their interest: it claimed that few have so far been contacted by any lenders.
Baseley said that officials at the Treasury “will make urgent contact with the lenders at senior level to establish their intentions and to impress upon each of them the need to implement NewBuy as a matter of priority”.
The Government launched NewBuy saying it would help 100,000 first-time buyers on to the housing ladder. The scheme also helps other home movers with only small deposits, who can buy new homes with a value of up to £500,000.
But the scheme has always had its critics, who say that buying a new property with only a 5% deposit means purchasers run the risk of negative equity, even if house prices only turn down fractionally.
Yesterday, Nationwide reported that house prices in March dipped 1%.
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Comments
Thought you were against the govt meddling in free markets Ray?
Builders where I am are competing to see who can squeeze the most newbuild shoeboxes on a former pub site. Seven is the record, so far.
@Hawkeye on 2012-03-30 14:28:41
Well said!
Succesive governments have introduced many half baked schemes that did/do not work and are not enforced but remain on the statute books.
However the one thing that would have stopped thousands of pubs and petrol stations from HAVING to close would have been minimum prices for petrol and alchohol in supermarkets, thereby saving these small businesses that provided convenient services for us. Have not time to go into detail.
Dear David Cameron
When will you learn to shut your big mouth and not implement hair brained schemes such as this which I said at the outset would not work.
Lenders have demonstrated yhat they are not ready and those builders who expressed interest are obviously not that bothered as they probably got canvassed by some pillock of a sales person who undoubtedly opened with the classic line of 'how's it going today?' Followed by - 'just a quick call......'
This week you have further proved your inability with 'just top the tank up as you are passing' and we now have a poor lady with 40% burns and traffic congestion around petrol stations all over the country.
I think you fall into the same category of the sales person described above, a pillock but sadly far better known.
I have been at this job for longer than you have been on this earth and I have seen stupid schemes brought to the fore and they have all just faded away in the mists of time.
Give me a job working at an inflated salary and I will advise you what will work and what will make you look a fool.
Regards
Hawkeye
your friendly experienced estate agent
Newbuy s a scam for developers benefit only and leaves the 1st time buyer in negative equity. I can see as house prices fall the banks will get more reluctant to lend on these schemes.
I'm sure estate agents don't like the scheme either.
As a long-time Conservative supporter and activist it pains me to admit it, but we have had a monotonous stream of premature, ill thought out, poorly prepared and researched 'initiatives' flowing from Departments connected with the property market.
With the exception of Grant Shapps' welcome reversal of HIPs in the first few days in power, his and the other Ministers pronouncements have had so little substance that even they must know they are just cynical attempts too 'look as though they're doing something', without actually having to.
Strange, isn't it, that the only one primed and ready to go just 8 hours after the announcement was a move which will EARN THEM MONEY - the iniquitous 7/15% Stamp Duty rises. Come on David - get a grip of your team and try not to stick the adverts in the papers until the details are both checked and printed!
Well there's a surprise.
Normally when people stop buying things the price falls. A strange government attempt to keep a bubble inflated won't help the poor saps silly enough to buy one of these things. Even the mortgage lenders aren't convinced which is a little strange as the whole thing is for them not first time buyers, as it is mainly the lenders who have an interest in high prices not the punters; they need to maintain loan to value. It smells to me like the lenders fear a further fall of over 5% ....... in which case why buy?