The move will allow more people to benefit from the lender’s Helping Hand scheme.
Helping Hand enables borrowers to access loans of up to six times their income, now available at the full 95% LTV on new build houses. Since its launch in 2021, the Helping Hand scheme has supported more than 57,000 buyers, with over 26,000 using it in the past year alone.
Nationwide is also increasing the maximum LTV on new build flats to 85% and extending mortgage offer periods for all new builds from six to nine months, which the lender says will provide borrowers and brokers with greater flexibility and peace of mind during the construction process - especially in cases where delays could otherwise jeopardise an application.
These changes come amid a downturn in new build mortgage sales, which in 2024 were around a third lower than in 2022, the final full year of the government’s Help to Buy scheme. Rising deposit requirements and affordability issues have contributed to the decline. Nationwide’s changes aim to directly tackle those challenges.
However, the full impact of these enhancements may be limited by existing lending restrictions. The Bank of England’s Financial Policy Committee caps the volume of loans above 4.5 times income at 15% of a lender’s qualifying book. Nationwide has called for a review of that cap, arguing it restricts access for thousands of would-be homeowners.
Henry Jordan, director of home at Nationwide, said:
“A strong housebuilding sector drives growth, and as the UK’s biggest building society, we’re backing it with a trio of positive changes. Not only are we increasing lending up to 95 per cent LTV on new build properties, but we are also offering first-time buyers the ability to borrow up to six times’ income through our Helping Hand proposition on new builds. In addition, we’re extending our mortgage offers to nine months – recognising the construction delay that can occur with new build properties and giving greater peace of mind to applicants.
"These changes have the potential to meet the strong first-time buyer demand for new builds that has gone unmet since the end of Help to Buy, whilst also stimulating the construction sector to build more homes with the confidence that buyers can get a mortgage on them. However, without a review of the high loan to income limit, this potentially significant change for first-time buyers, the construction sector and growth more broadly, will be constrained in terms of impact.”
Adrian MacDiarmid of Barratt Redrow plc welcomed the changes:
“Nationwide Building Society has, for many years, been a valued, trusted partner of Barratt Redrow in supporting our customers who aspire to homeownership. These latest changes are a testament to their commitment to the market, and we believe will help more buyers on this journey. Improving affordability and access to home ownership helps underpin housebuilders’ confidence to invest in order to deliver the homes that this country needs. We look forward to continuing to work with Nationwide Building Society to support our mutual customers.”
Ceri Pearce, UK sales and marketing director at Taylor Wimpey, added:
“Nationwide’s latest mortgage enhancements are a welcome step at a time when desire for home ownership is strong but affordability continues to challenge some customers – especially first-time buyers. The increase in the maximum loan to value on new build houses to 95 per cent will make it easier for buyers to secure a mortgage with a smaller deposit, and the extension of mortgage offers to nine months will give borrowers greater certainty and flexibility during the construction process. These changes reflect a strong commitment to supporting the housing market and responding to the underlying demand for new homes.”
