黑洞社区

The government is involved in last ditch talks with banks and housebuilders to rescue the roll-out of its flagship 100,000-home NewBuy mortgage guarantee following increasing reluctance from lenders to back the scheme.

According to a letter written by the Home Builders鈥� Federation executive chair Stewart Baseley to members, seen by 黑洞社区, 鈥淗M Treasury and other senior government officials will make urgent contact with the lenders鈥� to get them 鈥渢o implement NewBuy as a matter of priority鈥�.

The mortgage scheme, designed to offer 95% mortgages backed by a 拢1bn government guarantee to buyers of new build properties, was launched with fanfare by prime minister David Cameron on 12 March.

At the time the prime minister said the government was 鈥渄elivering on our promise to offer affordable mortgages to buyers who might otherwise not be able to raise the money to buy a newly-built home鈥�. 鈥淭his government doesn鈥檛 just talk about expanding home ownership: we鈥檙e making it happen,鈥� he added.

Builders involved in the scheme estimated it could raise new home sales by up to 15%.

But just three lenders and seven housebuilders were involved in the scheme at launch, with the promise more would be able to take advantage of the government backing in the coming weeks. The two biggest lenders, Lloyds and Santander, have not yet joined.

In his letter to members (attached opposite), Baseley said that the NewBuy process 鈥渉as not evolved as anticipated鈥� with 鈥渧ery few鈥� lenders having so far contacted builders to initiate NewBuy deals.

Under the scheme, housebuilders have to set up a fund or 鈥渃ell鈥� with a lender before they can offer the 95% mortgages on their homes. As these have a minimum size, smaller builders have to join together to form so-called multi-user cells (MUCs) before they can offer the mortgages.

Baseley鈥檚 letter said that the formation of MUCs in particular had been hit by the delay, adding to fears smaller housebuilders would continue to miss out.

鈥淥nly Nationwide is close to establishing a MUC, and [it has] understandable concerns about being the only MUC available,鈥� he said.

He added that lenders were 鈥渟till deliberating about the rules for entry into their MUCs, and what approval processes they will have, despite these being discussed extensively and, we believe, agreed with all parties.鈥�

Nationwide head of mortgage strategy and policy Andrew Baddeley-Chappell denied the lender was worried about being the only MUC available.

But he said the technical difficulties of bringing small and medium sized builders into the NewBuy scheme was causing delays. 鈥淭he process is going to take a bit of time,鈥� he said.

The HBF and Council of Mortgage Lenders (CML) are now asking individual lenders to accept changes to the rules in order that more deals are signed, and were set to review the situation with government on Thursday (29 March).

Chris Brown, chief executive of developer Igloo, said: 鈥淎t the moment the situation is maximising the damage to smaller builders as half a dozen firms are mopping up the whole first-time buyer market.鈥�

A CML spokesperson said: 鈥淲e recognise that a number of builders are keen to participate as soon as possible, and we are confident that the range of participants will grow substantially over the coming weeks and months.鈥�

A Department for Communities & Local Government spokesperson said: 鈥淲e are all working together to quickly expand the NewBuy Guarantee.

鈥淭here is real appetite from everyone to make this innovative and ambitious scheme a success, with lenders working as quickly as possible. We remain committed to ensuring that all interested builders get selling through the scheme as soon as possible.鈥�

A spokesperson for the HBF said the letter was a private communication to lenders: 鈥淭here are no deal-breakers here and we鈥檙e doing everything we can to speed the process up.鈥�