Scheme aims to help first-timers break into property market
THE Government-backed Newbuy Guarantee scheme launched this week will provide a major boost for those who need it most, according to Rightmove.
The survey found that just under two in every five first-time buyers believe that it means they are more likely to get on the property ladder within the next 12 months.
It also looks set to benefit “second-steppers”, those looking to sell and trade up for the first time.
The scheme will give buyers access to 95 per cent mortgages on newly-built homes costing up to £500,000, which means saving for a deposit won’t be a major barrier to purchase.
Banks, which have been demanding deposits of between 10 and 20 per cent, have been persuaded to lend as the risk on Newbuy mortgages will be underwritten by participating developers and the government.
The Council of Mortgage Lenders say Barclays, Nationwide Building Society and Natwest Home Loans Ltd are taking part in Newbuy and Halifax and Santander have announced plans to join the scheme.
Natwest has the lowest priced deals, offering a two-year fixed rate up to 95 per cent LTV at 4.29 per cent plus a five-year fixed rate at 4.99 per cent.
Rightmove director Miles Shipside says: “We’ve found that raising a deposit has long been the major obstacle for those looking to purchase a new home at the foot of the housing ladder. Newbuy helps address this challenge.”
“First-time buyers and second-steppers have long been frustrated in their efforts to get onto or move up the housing ladder by prohibitive deposit requirements Newbuy opens the door to these groups and can also serve as a great stimulus to help safeguard and create jobs in the new build property sector.”
Dacre, Son and Hartley’s new homes director John Shaw adds: “As the average age of first-time buyers is now estimated to be 37 in some parts of the UK and with rising rents making it difficult for first-time buyers to save for a deposit, any scheme that makes a first home more affordable must be welcomed.
“Feedback from the developers that we represent is already very positive as this scheme will help to provide a vital kick-start for small and large house builders who will be able to build homes and create jobs in the region.”
The Home Builders Federation said that 130 builders of all sizes had registered interest in participating.
Many big developers are taking part in the scheme, including Bovis, which is offering Newbuy at Holmes Meadow in Selby, The Landings in Hook, Broad Oaks in Hemsworth, Marmaville Manor in Mirfield, Ramsden Clough in Walsden and The Pines and The Elms and Huddersfield. Persimmon, Redrow, Bellway, Taylor Wimpey and Barratt, along with Linden Homes, Crest Nicholson and Miller are also taking part.
Mark Clare, chief executive of Barratt Developments, says interest is high. “Nearly 20,000 potential homebuyers from all around England have preregistered their interest on the company’s website, with the weekly registration rate now hitting 1,500.”
Although the scheme has been welcomed by many, others feel it discriminates against older properties.
York-based Kevin Hollinrake, managing director of Hunters Property Group, says: “It is disappointing that this new scheme, as with other 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 quite rightly identified that raising the deposit is the biggest barrier to entry for those wishing to enter the housing market, yet at the same time they are reintroducing Stamp Duty on properties between £125,000 and 250,000 for first-time buyers. The Government is giving with one hand and taking away with the other.”