Start date for indemnity scheme 'unrealistic'
Tuesday, 10 January 2012 12:45 PM
The government's proposed start date for its mortgage indemnity scheme for new homes may be unrealistic, says leading estate agent Countrywide.
The scheme is meant to start in March 2012 and guarantee up to 100,000 mortgages at up to a 95 per cent loan to value for new build properties in England.
Seven lenders making up more than 80 per cent of mortgage lending in the UK and 25 leading housebuilders have agreed in principle to take part. Under the scheme, builders will pay 3.5 per cent of the sale value into an indemnity fund and the government will support the fund to a total of nine per cent of the value.
But Nigel Stockton, financial services director at Countrywide, said there were still no explicit details of how applications under the scheme would be implemented and when the scheme would become a reality.
He said: "Having spoken to a number of the major lenders over this week, they appear to be awaiting the finer details of the actual application and submission process. In addition, it is yet to determined whether any systems changes are needed, which could further delay the process.
"Therefore the likelihood of when buyers will be able to access mortgages backed through the scheme is unclear.
"With a proposed launch date of March, implementing the scheme within the next 12 weeks seems unrealistic, with the more probable outcome that we begin to see the first few MIG backed mortgages in the second or third quarter of the year."
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