NEWBUY SCHEME
today’s market, generating up to 50 per cent of new build sales on some sites. “In addition, we would like to stress on
behalf of all homeowners that NewBuy is not a ‘sticking plaster’ to replace the void in house sales that will be left by the Stamp Duty Land Tax holiday. NewBuy is restricted to new build sales only, which made up approximately five per cent of all mortgage lending last year. Lenders estimate that the Stamp Duty Land Tax holiday assisted up to 170,000 property sales and stimulated hundreds of thousands of house price purchase chains, while NewBuy is limited to new build sales only, which have no onward chain. While we are supportive of NewBuy as a
vital tool to kick-start the new build market, NewBuy lacks any funding/ provision to assist homeowners with limited equity trying to sell, which we hope the Government will address in the Budget.”
Questioning: Robin King, director, Move with Us, questions why the NewBuy Guarantee scheme introduced by the government today only stretches to those buying new build properties: “Any help for the housing market is a good thing; however, historically new homes have accounted for less than 15 per cent of the whole market and have no established value so why are we just supporting new homes? “It’s good news for the construction
industry, but what will happen to the surplus of old stock that we already have on the market? “If the Government wants to make a real
difference to the property market, this scheme should be extended out to all home purchases. The vendor could pay the 3.5 per cent which is currently paid by the new home builder, into an account made available to the mortgage lender. “To some extent the scheme will help the
market, but we really need more detail now about the eligibility criteria for these 95 per cent loans and wonder if this scheme will actually be wide enough for the Government to reach its target of helping 100,000 families and young people move into homeownership?”
Supportive: John Cridland, CBI Director-General, said: “Unfreezing the housing market will be a major game-changer in the drive for economic growth,
20 APRIL 2012 PROPERTYdrum
Bellway Homes
village green style homes.
If the Government thinks that this scheme will kickstart
the market, well then it is living in Cloud Cuckoo land.’ JONATHAN SAMUELS DRAGONFLY
which is why we called on the Government to support home buyers by making it possible for them to take out low-deposit mortgages. Spring is traditionally a great time for house-buying, and I hope it won’t be too long before home buyers benefit from the NewBuy scheme.”
Scathing: Jonathan Samuels, CEO, Dragonfly Property Finance said: “The Government’s NewBuy guarantee scheme, like many such schemes over the years, smacks of desperation. The property market will come back when it is ready to come back and schemes like this are mere tinkering around the edges. “If the Government thinks this scheme
will kickstart the property market then it is in Cloud Cuckoo Land. “The concern is that NewBuy is
intrinsically leveraged, and we know where leveraging got us in the past. “People should buy when they are
genuinely in a robust position to do so, not because a bank says they can buy. “We all want to see more people owning
their own homes but the values of conservatism should not be superimposed on the forces of the market.
Lukewarm: Matt Hutchinson, director, flat and house share website
Spareroom.co.uk, said: “Any government assistance will be welcomed, but you do feel that this is simply scratching the surface of the problem, and until lenders across the board relax their lending criteria, it is going to continue to be an uphill struggle for first time buyers.”
Disappointed: Kevin Hollinrake, MD, Hunters, said: “The scheme will help many first time buyers which is excellent news. However, it is
disappointing that this new scheme, as with similar initiatives, is only aimed at new homes, rather than the remaining 90 per cent of people who want to sell or buy a home in the resale market. “The Government has rightly identified
that the deposit is the biggest barrier to entry to the housing market yet at the same time they are re-introducing stamp duty on properties between £125,000 and 250,000. The Government is giving with one hand and taking away with the other.”
Cynical: Jo Eccles, Director, Sourcing Property said: “New attempt to delay the bubble bursting in my opinion. No negative equity mention?”
Cynical: Henry Pryor, commentator: “Anyone spotted that all those vocally supporting NewBuy scheme either build, sell or fund houses? Are you thinking what I’m thinking...?”
Hopeful: Jordans Home Rentals: “Let’s hope this gets the market moving.”
Cautious: Melanie Bien, Bien Media: “So three lenders – Barclays, Nationwide, and NatWest – are offering NewBuy mortgages... we could do with a few more joining the party.”
Supportive: James Poynor, MD, Countrywide Land & New Homes: “I firmly believe that launching NewBuy is a game changer for the industry and will get Britain moving again. It could be radical in terms of its potential impact on the new build market in 2012 and beyond”.
Do you have any views to share?
www.propertydrum.com/articles/NewBuy
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