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Lenders shunning HomeBuy scheme

Some of the country’s biggest lenders are refusing to take part in the Government’s flagship HomeBuy scheme for affordable housing and there are doubts over whether trials will be ready for April 2006.

Abbey believes the volumes likely to be involved do not warrant the cost of developing systems and Alliance & Leicester has decided not to take part and has attended only one meeting with the Council of Mortgage Lenders.

The scheme has also been criticised by advisers, with John Charcol senior technical manager Ray Boulger saying the Office of the Deputy Prime Minister is still reluctant to specify the charges to be levied by providers on the equity share of the homeowner.

At present, only Halifax, Nationwide and Yorkshire Building Society are inter- ested in the scheme and Yorkshire says meeting the April deadline for the start of trials looks tight.

YBS corporate affairs manager David Holmes says: “The biggest difficulty is that the ODPM want to start in April next year. We also want to start then but there is so much work to be done. Although we are very positive about the scheme, this might be difficult.”

Abbey media relations executive Joe Wiggins says: “Due to the limited size and the investment in systems’ development, Abbey felt that involvement would not have been cost-effective at this time. We believe the scheme does have its limits but we recognise that first-time buyers are the lifeblood of the housing market, so much more needs to be done with regard to housing supply.”

Boulger says: “The real problem is that lenders are in the business of lending and not investing in property, hence the current situation. This is a classic example of the Office of the Deputy Prime Minister bulldozing its ideas through without engaging in meaningful consultation.”

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