Is the NewBuy Guarantee scheme just a deception?
Critics have deemed the new-build property scheme set up by the Government a ‘gimmick’ that will not help people who are on a low income buy their own home, but will support the construction industry instead.
The home buying scheme was set up to allow mortgages to be set up with as little as 5% deposit but reviewers have said that the idea is pointless as there are already low deposit deals existing on the market today. Dominik Lipnicki from Your Mortgage Decisions spoke to the Daily Telegraph and said, ‘You can already obtain 95% mortgages with comparable interest rates of 5% plus.’
He also agrees that the scheme encourages people to buy newly built homes which supports the construction industry but adds how this could affect the selling of old properties and break the property chain. There have also been concerns raised that the scheme could increase the amount of risky borrowers yet the Prime Minister has said that this plan will help mend the ‘broken’ property ladder.
A study of mortgage data was made and the results showed how building societies and banks prefer to lend money to buy-to-let landlords over people who wish to live in the property.
Mortgage lenders are also reluctant to take part in this scheme as only three have signed up and Jack Dromey, Labours Shadow Housing Minister spoke to the Daily Telegraph about this fact, ‘It would be absolutely wrong for the Government to raise the expectations of families and young couples only for them to find little choice.’
If you wish to read more information about the NewBuy Guarantee scheme, please click HERE .
If you’re thinking of buying or selling a property you can get a free conveyancing quotes from four reputable solicitors by clicking HERE . (You aren’t obligated to go with any.)
Amanda McGovern, Pali Ltd(1) Comments
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