Even though it was only launched a few short weeks ago the government’s flagship scheme to help first time buyers seems to have run into trouble.
The NewBuy mortgage scheme is supposed to help people with small deposits, particularly first time buyers, buy new build properties. However, the Home Builders Federation (HBF) have voiced concerns that the scheme has not been embraced by mortgage lenders as it should have been and that it is “not at all what was envisaged”.
The Executive Chairman of HBF, Stewart Baseley has sent a letter to home builders in which he said that the NewBuy scheme has had a “far from satisfactory launch”. He went on to say that lenders have not embraced the scheme, and that officials from the Treasury will make “urgent contact with the lenders at senior level to establish each lender’s intentions and to impress upon each the need to implement New Buy as a matter of priority.”
Flagship NewBuy policy
The government launched the NewBuy scheme in a blaze of publicity last month, hoping that it would help those people with small deposits get onto the housing ladder whilst creating 50,000 construction jobs in the process.
However, it seems that mortgage lenders have been slow to embrace the scheme, which is clearly causing frustration for the UK’s house builders who will be able to sell more homes if the scheme is made more widely available.
NewBuy scheme will succeed
Despite his concerns Stewart Baseley told the Telegraph newspaper that he believes the scheme will succeed, and that “what we have at the moment is a bunch of teething troubles.”
This opinion was echoed by mortgage advisers who said the mortgage lenders who initially said they would offer the scheme, Natwest, Woolwich and Nationwide, appeared to be unable to cope with the level of enquiries they received in the first few days and that staff training had been inadequate.
A spokesman for the Department for Communities and Local Government said: “We are all working together to quickly expand the NewBuy Guarantee, which opened for business to buyers only three weeks ago.”
“There is real appetite from everyone to make this innovative and ambitious scheme a success, with lenders working as quickly as possible, and more than 130 builders expressing an interest in taking part. We remain committed to ensuring that all interested builders get selling through the scheme as soon as possible.”