Barclays will no longer require a deposit from borrowers purchasing a home under the Right to Buy (RTB) scheme as part of a broader effort to make homeownership more accessible.
Barclays will use the RTB discount in place of a direct deposit, while borrowers will also receive the benefit of the reduced rates available for lower loan-to-value (LTV) mortgages.
For example, someone receiving a 40% discount on their home under the RTB scheme will be considered to have a 40% deposit, and therefore access to 60% LTV rates.
Lending is capped at 90% of the full market value, ensuring responsible borrowing, and excludes high-value properties, where a deposit is still required.
Lee Chiswell, head of mortgages at Barclays, said: “The Right to Buy scheme has long been a crucial route to home ownership for council and housing association tenants, yet we know that saving for a deposit remains a key obstacle.
“By lending for the full value of the property, we’re removing the need for buyers to have any deposit at all, helping many completely sidestep their largest barrier to home ownership.”
The move by Barclays followed its introduction of several new propositions and updates to its lending criteria.
These include Mortgage Boost, allowing family or friends to ‘boost’ the amount that can be borrowed towards a home without having to lend or gift money directly.
Barclays also this year increased its maximum loan amounts for high LTV purchases across all of its mortgages, to £640,000 for houses and £310,000 for flats, enabling more buyers to access homes in higher price brackets with just a 10% deposit.
