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6 February 2012
The Government announces plans to launch a new housing scheme to help kick-start the flagging property market and offer homes to 100,000 buyers in England.
On 1 February, the housing minister Grant Schapps announced plans for the launch of the NewBuy mortgage guarantee scheme, saying that he wanted to ‘go the extra mile’ to help people get on the housing ladder. Available from March, the scheme will enable lenders to offer mortgages of up to 95% for the purchase of new build properties, with underwriting from the Government ensuring that they are not taking on all the risk.
The scheme, which was originally intended for first-time buyers and others buying cheaper new homes, has now been extended to all UK buyers of new homes up to £500,000, as long as it is for use as their main home. This includes both first time buyers and those who are moving up the property ladder and is anticipated to help around 100,000 buyers in total.
He said of the scheme: ‘…the NewBuy Guarantee scheme will be on hand to help people buying newly built properties with just a fraction of the deposit they would normally need.’ Buyers will now be able to get a mortgage with only a £10,000 deposit, thus greatly decreasing the time it will take them to be able to get onto, or move up, the property ladder.
The scheme has been welcomed by industry experts as a positive step towards helping more people get on the housing ladder and hopefully kick-starting the property market.
Tinsdills Solicitors’ specialised residential property department is headed up by Partner Andrew Burrows, who said of the scheme:
‘Mortgage financing is an ongoing problem with conveyancing transactions and this scheme will certainly help to address that issue for some new-build home buyers. Any scheme that will help to stimulate the housing market will also be good for the economy as a whole.
For this particular scheme to have the hoped-for impact though, developers must feel confident that they can sell their new properties once complete. Only then will building start again in earnest. This scheme will help to build up that confidence, but general confidence in the economy will need to increase also.
I would like to see the government go further in its efforts to stimulate the housing market in next month’s budget. This could be done by extending the first time buyer’s £250,000 stamp duty threshold that is due to run out at the end of March, or even by abolishing it completely for all buyers on transactions under £250,000.’
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