"Both Deposit Unlock and First Homes are examples of forward-thinking collaboration, bringing new products to the market to help people achieve the dream of owning their own home."
The mortgages, the first made available under the pilot Deposit Unlock initiative which helps low deposit buyers purchase a new build home, are initially available on selected plots in the North East of England through four participating house builders; Barratt Developments, Bellway, Keepmoat and Vistry.
Deposit Unlock is a mortgage indemnity scheme developed with the Home Builders Federation and insurance brokers Gallagher Re. The scheme aims to help borrowers secure a new-build home up to a value of £330,000 with a deposit of just 5%.
Two-year fixed rates start at 3.50% and a five-year fixed rate is available at 3.75%. Both products are fee-free and come with a free valuation.
The launch of Deposit Unlock mortgages follows the announcement earlier this month that Newcastle Building Society is one of the first lenders to support the government’s First Homes scheme.
Stuart Miller, chief customer officer at Newcastle Building Society, said: “More than ever, we need to help provide more options for low-deposit borrowers looking to buy a new build home. Deposit Unlock is a truly innovative initiative and we’re pleased to be the first lender to offer products under the scheme.
“Both Deposit Unlock and First Homes are examples of forward-thinking collaboration, bringing new products to the market to help people achieve the dream of owning their own home.”
Paul Broadhead, head of mortgage and housing policy at the BSA, commented: “Deposit Unlock is a great example of a private sector initiative which addresses an important social challenge – helping people to buy their own home. This support for higher loan to value lending on new homes will be particularly helpful for younger buyers who often struggle to save for a deposit while paying rent at the same time. Our research shows that raising a deposit is now the single biggest barrier to would-be buyers. Building societies are synonymous with home ownership and it is good to see Newcastle Building Society leading the way as the first lender to sign up. I am confident that more will follow.”
Stewart Baseley, executive chairman of Home Builder’s Federation, added: “Ensuring people can buy a new build home is key to the industry’s ability to deliver the Government’s housing ambitions. Help to Buy has played a significant role in supporting increases in housing supply in recent years and has turned home ownership dreams into reality for hundreds of thousands of households. However, with the new Help to Buy scheme now less accessible in some regional markets including many parts of northern England, and with the overall programme due to end in 2023, the industry is striving to develop a sustainable solution to help more prospective buyers onto the housing ladder.”
