Deposit Unlock mortgages Scotland, Scottish new build home buyers, Buying property 2021 to 2022
Deposit Unlock mortgages
22 November 2021
Deposit Unlock mortgages launched nationally
Industry-led scheme for new build home buyers provides 5% deposit option
Deposit Unlock mortgages News
Monday November 22, 2021 – Deposit Unlock, the home building industry-led mortgage scheme that allows new build buyers to purchase with a 5% deposit, today launches nationally with 17 major builders after a successful regional pilot.
Nationwide is the latest major lender signed up to Deposit Unlock and will offer the product on new build properties for both first-time buyers and second steppers up to £750,000. Newcastle Building Society, which was the first lender to offer Deposit Unlock nationally following a successful trial in the north-east of England, has recently seen the first completions under the scheme. More lenders are expected to join in the new year.
With house prices rising, Deposit Unlock will help those who do not have access to large deposits or the Bank of Mum and Dad. It will provide a much-needed alternative to the Scottish Government’s Help to Buy scheme, which closes for good in March 2022. Together with the First Home Fund (also now closed), and demonstrating the demand for home ownership that exists in Scotland, the two schemes have already assisted more than 20,000 households since their respective launches.
The mortgage indemnity scheme has been developed by the Home Builders Federation and 17 of its largest members, alongside Homes for Scotland (HFS) and Deposit Unlock’s scheme manager Gallagher Re. It will be available on developments across England, Scotland and Wales and is open to all HBF and HFS members. More builders will be added in the coming weeks.
Upon completion of home purchases offered as part of the scheme the developer funds a mortgage indemnity and deposits cash to cover any potential losses. The scheme greatly reduces risk for the lender, protecting them from a proportion of the potential loss in the event of any default.
Nicola Barclay, Chief Executive of HFS said:
“Ensuring people can buy a new build home is key to delivering the Scottish Government’s wider housing ambitions given the interdependencies that exist across the sector. Too many people are unable to realise their ambition of home ownership because they simply can’t afford the deposit required. The industry has worked hard to develop a sustainable solution that will help more prospective buyers onto the housing ladder and so enable builders to deliver more much-needed homes of all tenures.
“This launch is testament to the foresight and investment made by members of the home building industry. We are also grateful for the commitment shown by our two launch lender partners and look forward to welcoming others in the coming months.”
Stuart Miller, chief customer officer at Newcastle Building Society, said:
“Deposit Unlock is a true innovation and great example of collaboration across the industry to help more people achieve the dream of home ownership. That ambition is now paying dividends as we’re seeing the first completions and I take a real sense of pride in the fact that families are now living in homes purchased through Deposit Unlock. Helping more people get on and up the property ladder is a key element of our purpose so I’m delighted that we were the trailblazers for this scheme.”
Andy Dean, Head of New Build at Nationwide Building Society, said:
“Raising a deposit continues to remain one of the biggest challenges facing those looking to move into their first home or on to their next. That is why we are pleased to be supporting Deposit Unlock and it’s great to see that it is now being rolled out nationally, providing a real boost to the new build sector.
“Supply of new housing also remains key to supporting first-time buyers and second steppers. Given the current strong appetite for new build properties, the Deposit Unlock scheme is particularly timely, especially given the forthcoming end of the Help to Buy Equity Loan scheme.”
Steven Rance, Managing Partner, mortgage indemnity at Gallagher Re, said:
“The rollout of Deposit Unlock nationwide marks a significant milestone for everyone involved in developing the scheme since it was first conceived. It is a brilliant example of cross-sector collaboration and innovation where house builders, lenders and the insurance industry have come together to address an important social challenge. Deposit Unlock will enable home ownership to become an affordable and realistic ambition for many more people, so we are delighted to play our part in its development and launch.”
The pilot in the north-east of England that was launched in June and saw Newcastle Building Society offering mortgages through the scheme on the sites of four participating builders. The first successful completions through the scheme were announced last week. The building society then rolled out the scheme nationally in September with a limited number of builders, in advance of the Nationwide announcing in October its intention to join Deposit Unlock.
1. Homes for Scotland (HFS) represents c200 members delivering the vast majority of new homes of all tenures in Scotland (www.homesforscotland.com / @H_F_S).
2. The Home Builders Federation (HBF) is the principal representative body for private sector home builders and voice of the home building industry in England and Wales. HBF member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk
3. The Nationwide offer is available through mortgage brokers on standard new build loans1 of between £25,000 and £750,000. Borrowers using Deposit Unlock will have access to the Society’s range of 95% LTV mortgages, currently starting from 2.62%, which they can us to buy a house or flat2.
4. The Newcastle Building Society is offering the scheme up to a value of £600,000 and has announced a range of competitively priced Deposit Unlock 95% LTV mortgages , starting at 2.79% for a two year fixed rate.
5. The 17 partaking house builders, all members of HBF are; Barratt, Bellway, Bewley, Bloor Homes, Countryside Properties, Crest Nicholson, Croudace, Davidson Group, Fairview, Hill, Keepmoat, Miller, Persimmon, Redrow, Taylor Wimpey, Thakeham, Vistry. Further builders are expected to join the scheme in the coming weeks.
6. Each lender using the scheme will assess affordability in the normal way using their lending criteria, which includes consideration of income, outgoings such as regular payments and living costs, as well as an assessment of future changes that might have an impact on a borrower’s ability to pay a mortgage.
Nationwide Building Society
Nationwide is the world’s largest building society. It is owned by its 16 million members and exists to serve their needs. The Society is one of the UK’s largest providers for mortgages, savings and current accounts, as well as being a major provider of ISAs, credit cards, personal loans, insurance and investments. As a mutual organisation, Nationwide Building Society uses its unique position to help rebuild society by making a positive difference to the lives of its members and the communities in which they live.
It is why Nationwide still values a branch network, supports communities through charitable grants, and places a premium on helping people thrive financially – whether helping them into a home of their own or giving them the financial support they need. Taking a stand and making a difference is what sets Nationwide apart. None of which would be possible without the dedicated service of its 18,000 employees.
Newcastle Building Society
Newcastle Building Society* is the biggest building society in the North East, with a network of 30 branches and assets of more than £4.9bn. We’ve been here for our members for over 150 years. As a leading local employer, we’re committed to growing our region’s talent and being a great place to work where people can realise their potential. We hold Platinum IIP and were voted Number 2, Best Places to Work in the North East in 2019. We help people to own their home, to save and to plan their finances through our range of products and services. We believe in the role of the high street at the heart of our communities and are proactive in making financial information and financial advice accessible across our region. Our Financial Advice is provided through our Newcastle Financial Advisers Limited division**. We’re dedicated to helping our North East communities make positive changes; since 2016 the financial support through grants and donations from the Newcastle Building Society Community Fund at the Community Foundation to benefit local causes has surpassed £2.1m www.newcastle.co.uk
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