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Free FTB loans could put squeeze on smaller housebuilders

Smaller housebuilders could be squeezed out of the market under government plans announced today to offer free loans to first-time buyers of new build property .

Mike Ratcliffe, chief executive of Wolsey Securities, an independent finance specialist for housebuilders, says Alistair Darling must clarify how his free loans incentive cofunded by the government and large-scale developers will work.
He says: “It is essential that Darling clarifies the free loans initiative referred to in the announcement, supposedly cofunded by the government and large-scale developers, without delay.

“Further clarification of this measure will certainly be needed, but it would be unacceptable if this led to small and medium sized developers being disadvantaged.

“Previous government loan initiatives for householders earning less than £60,000, such as MyChoiceHomeBuy, have failed totally to have any impact on the market through being under resourced, underfunded and poorly operated.

“Buyers of new homes need to see that this is not just an empty promise.

“If the government’s new homes programme for 240,000 new homes per annum by 2016 is not restarted immediately, the UK’s housing shortage will remain acute for the foreseeable future.”

But Ratcliffe concedes that the government’s announcement to scrap stamp duty for properties under £175,000 for 12 months is a welcome one at least.

By ending the uncertainty over whether it would introduce a Stamp Duty holiday period, which has virtually killed off the property market in the last month, he says it will hopefully stimulate a sense of urgency in buyers’ minds.


Mixed reviews over government plans

The mortgage industry has had mixed views to the government’s rescue plans for the housing market, revealed today.

GMAC cuts 5,000 jobs in USA

GMAC, parent company of GMAC-RFC, is cutting 5,000 jobs from its ResCap business and closing 200 branches in the US.

Halifax reports 10.9% drop in house prices

Halifax has reported a 1.8% fall in house prices from July to August 2008, taking the average house price down to £174,000, a fall of 10.9% from last year.

The devil is in the detail of council mortgage plan

I’ve been reading with great interest the national press coverage of local authority chiefs calling for the power to offer competitive mortgages in an effort to rescue the housing market.


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