Mortgage News
NatWest’s decision to sell NewBuy direct “frustrating” – Barclays
Barclays has said that it understands how NatWest’s decision to sell NewBuy products direct through its call centre is “frustrating” for brokers.
On 12 March, NatWest was one of three lenders, including Barclays and Nationwide, to confirm NewBuy ranges for the official launch of the scheme, with NatWest proving the most competitively priced with its two-year fixed rate at 4.29%.
While Nationwide has made its deals available through intermediaries-only and Barclays said its deals will be primarily sold through IFAs, NatWest has chosen to sell direct through its call centre – a move which has been criticised by brokers.
In his feature The Budget can be built on, David Finlay, intermediary managing director for Barclays said potential borrowers should consider getting advice before applying for a NewBuy mortgage.
He said: “Now we all know the LTV tightrope that lenders continue to walk so this is not a scheme to be entered into lightly which is why it’s vital that any potential borrower considering this particular scheme gets the best available advice.
“As such there has been much criticism in the intermediary community regarding Natwest’s decision to only offer its NewBuy product directly.
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“Now I’m in no position to point the finger or judge how individual lenders distribute their products but I can see how frustrating this might be for brokers who, after all, are arguably in the best position to offer professional, independent advice.”
A spokesman for NatWest Intermediary Solutions added: “Any scheme that makes it easier for credit-worthy borrowers to secure a loan that will enable them to buy their desired property is welcome. Due to the specialist nature of the NewBuy scheme, a dedicated telephony-based team has been set up specifically to deal with all mortgage applications using this scheme.
“All customer enquiries regarding a mortgage using the scheme, whether that is via a NatWest branch, an intermediary or any other channel, must be referred to this dedicated team.
“In the intermediary channel we have continued to support the Government-backed shared equity schemes including the current FirstBuy scheme and have a product in our core range specifically for people using the scheme to buy their first property. We also continue to support first-time buyers with high LTV mortgages.”
Last week, Stuart Baseley, executive chairman of the Home Builders Federation wrote a letter to builders expressing his frustration that more lenders have not backed the NewBuy scheme.
In the letter, dated 27 March, Baseley said that the three lenders are “clearly waiting for Lloyds to enter the field” given its “sizeable market share in the new build mortgage market.”
Baseley said that he understands Lloyds and Santander are both due to launch in the next two months.
Under NewBuy, house builders and the government have committed to cover a limited amount of any future losses. The house builder will ring fence 3.5% from the sale and the government 5.5% which will be used to compensate lenders if they have to repossess the home and sell it for less than the mortgage value.
Meanwhile, Nationwide has confirmed that more builders will now be able to offer their properties for sale under the NewBuy scheme.
The building society is opening up the scheme to a wider range of lower volume builders, with Fairview New Homes being the first builder to sign on to the multi-user agreement with Nationwide for NewBuy.