NewBuy scheme 'a positive move'
14th Mar 2012
The government's NewBuy scheme is a positive one, but it is not yet known what impact it will have on the property market, one analyst has stated.
Liam Bailey, head of residential research at Knight Frank, said it is a positive move in terms of underpinning house prices, but it is "negligible in its scale".
Earlier this month, housing minister Grant Shapps announced details of the NewBuy scheme, which will see three high street lenders and seven building firms begin to offer mortgages on newly-built properties to people with just a five per cent deposit.
This financial product is not available anywhere else in the market, Mr Bailey observed, but he noted that such schemes often fail to make a big impact on the market, as they are "too small".
"It is certainly not a negative in terms of the housing market. The argument would be that it will keep prices higher than they otherwise would have been and therefore potentially it will have a negative effect in terms of affordability, but that is a different issue," he added.
In terms of the overall UK housing market, Mr Bailey said two things need to happen to make it more sustainable, with the first being the eurozone crisis having a line drawn under it to stop negative headlines.
The second will be confirmation that quarter one gross domestic product growth is positive, which will feed into higher consumer confidence, the expert added.
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