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Labour wants ‘improved and more effective’ NewBuy

Construction Building 480

Labour is meeting with builders to explore ways to improve the Government’s NewBuy scheme with proposals expected soon.

Speaking at a Westminster Social Policy Forum conference on housing this morning, shadow housing minister Jack Dromey said the impact of NewBuy has been “pretty modest”.

He said: “We are meeting with a number of builders next week to discuss some of our ideas to improve the operation of NewBuy and will be able to say more then. There have been some very interesting ideas put to us. Any scheme is useful but what it has delivered so far has been pretty modest. It was a step in the right direction though and built on some of the things we did in Government. The question is how to make it more effective and that is our focus.”

Under the scheme, announced in the Government’s housing strategy last November and launched in March, lenders will offer 95 per cent LTV mortgages for new-build properties against a mortgage indemnity guarantee funded jointly by house builders and the Government.

Redrow Homes group managing director John Tutte also hit out at the “slow” and “disappointing” impact of NewBuy.

He said: “NewBuy take-up has been disappointing. Until now interest rates have been too high and at current rates NewBuy is not the answer.”

Tutte says borrowers looking to upgrade properties using NewBuy can see monthly payments double and it “stretches people too far”.

In June the Home Builders Federation revealed 600 people had reserved homes using the NewBuy scheme in the first three months.

Dromey also promised to engage with new housing minister Mark Prisk but warned the real policy was driven by the Treasury.

He said: “My experience of Mark Prisk is that he is a modest man unlike his predecessor [Grant Shapps] who gives hubris a bad name.

“Ultimately, he will not be the master of his own destiny as that will be chancellor George Osborne. We will engage with him but it is No. 10 and No.11 that have to make decisive policy changes.”

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