Three of the UK's leading lenders will offer 95% Loan to Value (LTV) mortgages on properties built by Barratt, Bellway, Bovis, Persimmon, Redrow and Taylor Wimpey as part of the government's NewBuy schemeunveiled today (Monday 12 March).
Barclays launched two competitively priced mortgages to support the NewBuy initiative. First time buyers or home movers purchasing a new build house or flat with participating builders up to the value of £500,000 will have a choice of a Barclays two year fixed rate mortgage at 4.99% or a four year fixed at 5.89%, both of which come with a £499 application fee and revert to a lifetime tracker at base plus 3.99%.
'We are pleased to be one of the first lenders to be helping even more buyers with small deposits to buy new homes,' said Andy Gray, head of mortgages for Barclays.
'We believe this will boost housing market confidence and support the flow of new housing providing positive consequences for jobs and the economy as a whole. The mortgages we have launched today give buyers a really attractive rate, and strike the right balance for Barclays and builders to offer 95% mortgages in a sustainable way,' he added.
He pointed out that Barclays has actively been helping more first time buyers get on the property ladder and this was confirmed in its recent results, with lending to first time buyers up 22% in 2011, supported through the extension of mortgages up to 90% LTV in October 2011.
In 2010 Barclays pioneered a similar mortgage indemnity scheme 'Perfect 10' with Bovis Homes to help stimulate the new build market at 90% LTV, which has helped to shape the NewBuy scheme.
Barclays said that home buyers interested in purchasing a new home should contact their local development or visit the builders website. A typical first time buyer purchasing a new home with the participating builder at £180,000 and requiring a mortgage of £171,000 would pay £998.65 per month on a 25 year repayment basis, when taking out the Barclays two year fixed at 4.99%.
Nationwide Building Society is offering borrowers who buy a new build house or flat in England with a builder that is registered under the NewBuy scheme the option of a three or five year fixed rate mortgage at 95% LTV.
The three year fixed rate is available at 5.69% (95% LTV) with a £900 product fee, £99 booking fee, that is payable upfront and non-refundable, for house purchase and existing customers moving home. There is a £500 product fee discount for first time buyers.
It also has a five year fixed rate available at 5.99% (95% LTV) with a £900 product fee, £99 booking fee, payable upfront and non-refundable, for house purchase and existing customers moving home and with a £500 product fee discount for first time buyers.
It said that these rates match those currently available for customers purchasing a second hand property at 90% LTV. The first phase will see products available to intermediaries only. The Society will make the products available through branches at a later date.
'Nationwide is committed to supporting the NewBuy scheme and is one of just a handful of lenders making products available from launch,' said Andrew Baddeley-Chappell, head of mortgage strategy and policy at Nationwide.
'The widening gap in housing provision is undisputed. Nationwide is supportive of this initiative that enables a return to lower deposit mortgages within the new build sector. NewBuy will boost the supply of properties, increase employment, and provide affordable mortgages to those with more modest deposits, including first time buyers,' he added.
NatWest also confirmed its participation in the launch of the Government NewBuy scheme. 'We welcome the builders and Government sharing the risk to make this initiative possible. We hope the increased demand it will create will help lift the economy via the construction of additional homes,' said Moray McDonald, mortgages director at NatWest.
'We have maintained 90% LTV lending for second hand homes continuously since the financial crisis. NewBuy allows us to now extend 90% to 95% loans to new home buyers, backed by strong promotional rates,' he added.
Santander UK said it is in the final stages of agreeing partnerships with selected developers and will start to offer its first NewBuy mortgages via intermediaries with established ties to these house builders by the middle of the year. Halifax is also planning to join the scheme.
RESOURCE Propertywire
