Nationwide is set to increase the maximum loan-to-value (LTV) available for those looking to purchase a new build house to 95%, effective from 26th June.
In addition, prospective homeowners will also be able to use Nationwide’s Helping Hand to make their new build house purchases, up to the maximum LTV.
Nationwide’s Helping Hand mortgage boost gives first-time buyers the ability to borrow up to six times income at up to 95% loan-to-value.
It enables them to borrow a third more versus Nationwide’s standard high LTV lending at 4.5 times income.
Nationwide will also be increasing the maximum loan-to-value available for applications involving new build flats to 85%.
As part of the changes, the lender will also be increasing its offer period for new build properties from six months to nine months.
Although the vast majority of new build purchases complete within a six-month period, this change aims to give customers and brokers greater certainty during the construction process.
Henry Jordan, Nationwide’s director of home, 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% 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 said: “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% 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.”
