The scheme was widely hailed as a welcome opportunity, allowing those struggling to save a deposit to get on the property ladder with just a 5% deposit and a 90-95% loan-to-value mortgage from a participating lender.
At present, Barclays, Halifax, NatWest, Santander and Nationwide are all offering NewBuy mortgages for properties offered by one of the thirty-plus developers participating in the scheme, up to and including a sale price of £500,000.
At The House Crowd, we acknowledge the NewBuy scheme has some indisputable benefits for those struggling to buy, especially young people and growing families with limited equity in their home needing to upsize.
However, we believe the NewBuy scheme overlooks the plentiful supply of distressed properties that could be brought back to life with renovation, many of which are located in areas with an established infrastructure and services on the doorstep – the same of which cannot always be said for new build developments.
In our opinion, a concurrent VAT exemption for the modernisation of any property that has been vacant for 6 months and is in a distressed condition should be introduced alongside the VAT exemption already in place for new builds. This would open up a greater variety of properties for struggling buyers, reinvigorate existing communities and, ultimately, be more cost-effective.
