New Buy Mortgage Scheme could be in trouble
News at Best UK Mortgages
30/03/2012 - Lack of lenders showing interest
The Home Builders Federation (HBF) has expressed their view that the NewBuy mortage scheme is already in crisis due to the lack of support from UK lenders. The scheme was developed by the HBF along with the Council of Mortgage Lenders.
The head of the HBF has said he felt that the scheme was “not at all what was envisaged” and that the fact that the lenders have not bought in to the scheme was "incredibly frustrating and annoying". He also said that there are signs that the smaller building firms were being shut out. Seven large builders were already onboard and the HBF gave the CML with the names of 130 builders who had previously shown an interest in joining the scheme but that there had been little interest shown in the scheme by lenders who had not contacted home builders so far.
To this end, it supplied the CML with the names of the 130 builders who had flagged their interest. "However," the letter said, "it has become increasingly clear over the past week or so that very few home builders have heard from any of the lenders to date".
Following a crisis meeting with the Council of Mortgage Lenders and the HBF, staff at the Treasury are now being asked to encourage UK lenders to back the scheme after what has been called a "far from satisfactory launch". The officials have been given instructions to instigate "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".
The scheme was aimed at providing 95 per cent loan to value mortgages to buyers who would purchase new build properties, thus helping the ailing construction industry as well as providing mortgages to those that most need help.
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