NewBuy scheme needs early launch - CPBigwood
The Government’s NewBuy Guarantee scheme needs to be
implemented quickly if it is to kick-start the housing market, an expert has
Simon Gibbs, director and head of the Stratford-upon-Avon
and Henley-in-Arden offices of estate agents
and auctioneers CPBigwood, said it was an “excellent initiative”.
“Hopefully this will give first time buyers a bit of a
leg-up and help them on to the ladder.
“But equally important is that it gives more confidence to
builders and the construction industry generally, filtering through into the
wider market. The sooner it is introduced the better,” he said.
And he dismissed suggestions from some pundits that the
scheme could prove inflationary, saying the sector badly needed the stimulus.
The NewBuy Guarantee is forecast to help as many as 100,000
people buy a new-build home with a deposit of 5-10 per cent rather than the 20
per cent typically demanded by lenders.
The Government initiative originally aimed at first time
buyers has been widened to include home movers.
It has been masterminded by the Home Builders Federation and
the Council of Mortgage Lenders, with Barclays, Nationwide Building Society and
NatWest Home Loans among the lenders already committed, with others expected to
Backed by an insurance scheme, developers would contribute
3.5 per cent of the purchase price while the Government guarantees 5.5 per
cent. The scheme is available on flats and houses up to a maximum value of
£500,000 in England
Mr Gibbs said: “First time buyers have been struggling to
afford deposits because, unlike in the past, you can't get 95 per cent
mortgages any more.
“Hopefully this will prove a big boost to those who have
effectively been excluded from the market. At last they will be able to own
their own home.”
Under the NewBuy scheme, house builders and the Government
have committed to cover a limited amount of any future losses that lenders in
the scheme could suffer. This happens if a lender has to repossess a property
and sell it for less than the mortgage value.Back to top