Starting July 01, Halifax is lowering the minimum deposit required to secure a mortgage on new build homes from 10% to 5%.
“We recognise that getting a deposit together is still the biggest hurdle faced by most first-time buyers, and these changes could reduce the minimum deposit required on an average house to as little as £4,000,” Andrew Mason, head of strategic partnerships for housing at Halifax, said.
Aside from lowering the deposit needed for new build houses, Halifax has also removed the requirement that higher LTV new build loans (above 85%) be through developers on its panel. This change will increase the availability of 5% deposit mortgages to houses constructed by Britain’s more than 2,000 smaller housing developers.
The major lender will also now accept a 5% deposit on both new build flats and houses in shared ownership schemes run by housing associations.
Shared ownership is available where the share being bought is between 25% and 90% of the property’s value. Buyers can now borrow up to 95% of their share of the home with the lower deposit requirement.
“We have worked closely with the industry and listened to their needs to develop these changes. This underlines our confidence in the new build market and our support for the UK construction industry,” Mason said.
He also pointed out that bringing the maximum LTV in line with existing properties also has the advantage of making greener homes more attractive and attainable for FTBs.
“Just as importantly, supporting new build homes supports the drive to net zero by making warmer, greener homes more accessible and attainable for potentially thousands of new buyers,” Mason noted.