Developer hits out at NewBuy mortgage rates

Thursday 2nd August 2012

More than 750 reservations have been made under the taxpayer-backed 95% NewBuy mortgage indemnity scheme.

But some of the 23 house builders signed up to the scheme remain unhappy with lenders’ interest rates. Some NewBuy deals are virtually double the deals that home-buyers with larger amounts of equity have access to.

The Government said NewBuy, which launched in March, still says that it will help 100,000 people buy a home.

Cala Homes has reported just five NewBuy reservations, with chief executive Alan Brown saying: “I am disappointed with the level of sale, but I would never have expected the price to be what it is. I would have thought it would be closer to 4% than 6%.”

Latest figures show that NatWest is cheapest for NewBuy at no more than 4.79%, while Santander is dearest at up to 5.99%, followed by Lloyds at 5.89%. Barclays’ lending rate on the product is 5.69%.