Newbuy scheme and Redrow

shall78

Hi

I have been off the housing ladder for a year and decided to get back on with the newbuy scheme, I found a nice Redrow home and visited it a couple of times, two weeks ago I told the I wanted to buy it and negotiated the stamp duty being paid and 5% off the purchase price, or this could be used as deposit.

I had the mortgage adviser do his affordability check and I told him I was intending to use the newbuy scheme, no issues, deposit paid £1000 and solicitor informed, mortgage application underway with Natwest. Reservation letter sent to me a sent back to redrow outlining the agreed deal.

Go into the site office today to fill out some more paperwork, and am told they cannot offer the agreed discounts and incentives as I am on Newbuy scheme, I was livid, having driven an hour down to the site, to be then told that , on challenging the sales lady (who on my last visit could not rember who I was) told me I never mentioned it to her, which I did, she told me she needed to call the sales director, I said I did not mind waiting and she flapped around. I eventually left and she agreed to call me back,

Gutted and unsure what the next move is. Buyer beware

Fullbra

Under the terms of the NewBuy scheme you can't have any other financial incentives like stamp duty paid as well. The mortgage adviser should have checked whether you were getting other financial incentives from the builder. If you had told the builder you were going to use NewBuy, they would have told you about the financial incentives restriction

shall78

Thanks for that, did not see any caps on financial incentives when I was looking at the scheme, thought it was down to the builder participating, I thought the only financial restriction was public body support or council support already in existence?

alex1987_2

There seems to be very little information avaliable on NewBuy. I spoke to Natwest around a newbuy application, and asked if they were allowing part exchange. They said they were, but only a day or two later another member had posted on this site that they aren't, and their deposit had been wasted....
It seems to be up in the air.... poor.

poppy10_2

Builder incentives:

• Builder cash backs/deposits and other financial incentives such a payment towards legal fees, stamp duty, mortgage subsidies or part-exchange of your clients existing property will not be permitted in conjunction with a NewBuy application.
• Non-financial incentives such as soft furnishings, white goods, carpets etc are allowed.

Minimum deposit:

• A minimum deposit of 5% is required on all NewBuy cases which can only come from:
  • The applicants own resources
  • Gift from family/friends (the gift must not be repayable under any circumstance and have no conditions attached)

Lending Criteria

• The property must be the applicants’ main residence.
• The property cannot be used for a holiday or second home, or a Buy to Let: it must be owner occupied.
• Share Ownership and Equity Share unacceptable in conjunction with NewBuy.
• The scheme is currently only available on properties in England.
• NewBuy applications are only accepted on a capital and repayment basis.
• Maximum Loan Size £250,000

alex1987_2

Thanks Poppy10.

I've not seen the 'Builder Incentives' part of the criteria before other than on the Nationwide website.

Other reports i read suggested that Part-ex was at the lenders discretion?

VortexSteve

Is that just the Nationwide criteria (the loan size makes me think it is)?

The guidance I have seen said that white goods could only be included if they were being given as standard across the development, not as an incentive.

As for part ex it is down to the lender, and the current 3 have said no.

A bit of a shame recently that Natwest have put up their rates, I suspect they were just getting swamped with business and their call centre couldn't handle it.

shall78

Hi, just an update on Natwest, they say that they except financial incentives(well Steve from the call centre does) HOWEVER they need to be disclosed andadded to the CML Disclosure form, the total value cannot exceed 15% and will betaken and will be viewed as a deduction from the total value in the eyes of thelender.

I have asked for this in writting so we will see what comes back, Redrow made it clear it was the lender that refused to take incentives, however as with any New build sale the lender ignors these incentives and makes discloses them on the CML form.

alex1987_2

Hi - seems Natwest cant make their minds up?
15% of what exactly? And does this include or exclude part ex?