Shapps says MIG won't distort new-build values
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Housing minister Grant Shapps says the government is set to launch its mortgage indemnity guarantee scheme in March and is confident it will not distort valuations in the new-build sector.
Shapps revealed last week that the NewBuy Guarantee scheme will be available on new-build homes up to £500,000 and will be open to
first-time buyers as well as home movers.
Under the scheme, announced in the government’s housing strategy last November, lenders will offer 95% LTV mortgages for new-build properties against a MIG funded jointly by house builders and the government.
Giving evidence to the Communities and Local Government Committee inquiry into the financing of new housing supply last week, Shapps denied builders would add a premium to properties sold under the scheme to make up for the 3.5% of the value of each home they must put into a MIG funding pot.
He told the committee: “There is always an argument that initiatives like this somehow divert the market from what it was going to do in the first place. But we are satisfied that, because this is a competitive housing market, this scheme will not particularly distort it.”
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