Some lenders have recently launched 95% loan-to-value mortgage deals that are available on new build homes. These deals are available to both first-time buyers and general home movers.
However, something to keep in mind is that lending on new-build flats is restricted to 85% LTV apart from in the case of shared ownership properties, where it will lend up to 95% LTV on both houses and flats.
Why introduce 95% mortgage deals on new builds?
Recent data from the Office for National Statistics demonstrates that the average price of a new-build property now exceeds the Help to Buy regional price caps in five of the nine regions.
Some first-time buyers are having to find an extra £2,000 just to reach a 5% deposit on their first property. Therefore, it is recognised that government support, such as the Help to Buy scheme, isn’t always reliable for those wanting to take their first step onto the property ladder. The introduction of this 95% mortgage deals on new builds aims to step in when government support isn’t enough.
Why new build properties?
New build properties are considered much more energy efficient, and therefore these lenders believe that it important that they have these types of properties available to them. First-time buyers should the same opportunity as others to purchase these types of properties.
The lender’s head of Mortgage products commented, “We recognise that lenders can play a more active role in greening the UK housing stock and aligning our policy for both new and second-hand homes is a first step of many in our efforts to support the fight against climate change.”
If this is something you’re interested in, get in touch and one of our advisors will be happy to discuss this further.