Home Builders Federation executive chairman Stewart Baseley has written to builders expressing his “frustration” that more lenders have not embraced the Government’s NewBuy scheme.
The letter, dated March 27 and published in the Telegraph today, says the launch on March 12 was “far from satisfactory”.
Baseley says HBF has held crisis meetings with the Council of Mortgage Lenders and the Treasury after just three lenders, RBS, Nationwide and Barclays, made a strong commitment to the scheme.
He says these lenders are “clearly waiting” for Lloyds to enter the market, “given its sizeable market share in the new build mortgage market”.
Baseley says Lloyds is scheduled to offer the scheme on April 16, with Santander to follow in May.
He says: “I want to assure you that HBF has made both the CML and Government fully aware of these problems and many discussions have been going on, especially in the last 48 hours, to try to resolve them. Following a meeting with senior officials from Government and the CML this morning, a number of steps have been agreed which should hopefully speed up the roll out of the scheme to all builders who wish to participate.
“First HM Treasury and other senior Government officials will make urgent contact with the lenders at senior level to establish each lender’s intentions and to impress upon each the need to implement NewBuy as a matter of priority.”
The NewBuy scheme will allow buyers with a £10,000 deposit to purchase a newbuild property worth up to £500,000. Housebuilders will deposit 3.5 per cent of the sale price for each home in an indemnity fund and the Government will provide additional security of 5.5 per cent.
The builder’s contribution will be held by the lender for seven years and interest will be payable on it. Funds will be returned to the developer after the seven year period minus a portion of any losses on the loans in the scheme.