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NewBuy is welcome step despite its flaws

The government launched its NewBuy scheme to help fund the deposit gap recently, with arguably muted fanfare.

Some have been quick to criticise the initiative as a sticking plaster for a broken leg, but with the public purse remaining in a perilous state, room for manoeuvre is pretty limited.

Positively, a number of lenders have already announced NewBuy products and I predict a few more big names will join the party soon.

Any boost to the new-build sector must be welcomed as it continues to recover from a battering.

There are now some more positive indicators.In 2010, you were three times more likely to be repossessed in a new-build property than a second-hand one. This reflected the surplus of investor units that were built and bought at the wrong time.

Today the trend has reversed, with danger of repossession now at least five times lower for those who have bought a house built since 2010 than for those in a second-hand property of any age.

To be fair, in both cases actual repossession numbers were a small proportion of overall stock.

New-build property comes with a number of built-in advantages, such as energy efficiency and lower repair costs – exactly what cash strapped first-time buyers, who the NewBuy scheme is aimed at, need.

So while we can acknowledge this is not a complete solution, let’s celebrate it as a much-needed positive step.


Week in numbers

172% – The rise in demand for petrol last Thursday amid fears of a strike, retailer group RMI Petrol reports. 686 – The number of pages in the Finance Bill which passed through Parliament last week. 33 – The average age of Treasury staff compared to a general civil service average of 45, an internal […]

Bridging sector likely to bust £1bn barrier

Low interest rates are making bridging loans an attractive option for buy-to-let landlords with ambitious schemes that high street lenders are reluctant to fund.

Demand sees Skipton pull 95% deals

Skipton Building Society has temporarily pulled out of 95% LTV lending. The lender entered the 95% LTV market in March last year but says it has temporarily withdrawn products due to unexpected demand.Skipton initially offered a single product through subsidiary Connells. Before its withdrawal it offered two 95% LTV products – a three-year and a […]


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