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NewBuy scheme ‘unfair to small house builders’

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NewBuy scheme ‘unfair to small house builders’

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Published by Julien Tremblin for 24dash.com in Housing and also in Central Government

NewBuy mortgages ‘unfair to small house builders’ NewBuy mortgages ‘unfair to small house builders’

The House Builders Associations (HBA) has welcomed the Government’s NewBuy mortgages but warned it could create further barriers for smaller house builders.

As only seven of the country’s largest providers are currently working on the scheme, the HBA has accused Ministers of giving an “unfair competitive advantage” over small and medium enterprises.

The NewBuy scheme will allow people buying new-build properties to borrow up to 95 % of the value of their new home.

Three high-street lenders are offering the new mortgages, in partnership with seven of the country’s largest house builders: Barratt, Bellway, Bovis, Linden Homes, Persimmon, Redrow and Taylor Wimpey.

The move has been considered unfair by the HBA – a representative body for 600 house builders – as the Government has not yet announced how and when customers of the new product will be able to work in cooperation with all house builders.

As well as helping would-be home-owners, ministers say the new scheme will boost the construction industry – the Government estimates that up to 50,000 jobs could be supported if NewBuy is fully used.

Commenting on the scheme, Roger Humber, Strategic Policy Advisor for the House Builders Association said:  “The NewBuy scheme as currently launched is available to only a few larger house builders. 

"It gives them an unfair competitive advantage over smaller builders and we are surprised that the Government has underwritten the scheme without knowing whether, or when, customers of all sizes of house builders can access it.

“Promises have been made that it will be available to help purchasers from all sizes of house builder and the HBA will be monitoring its roll out carefully, to ensure that does happen quickly.

“Failure to extend coverage would raise serious questions about the propriety of Government providing indemnities exclusively for the benefit of a few larger builders, particularly through an off-shore tax arrangement.”

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