In a big a boost that could eclipse Help to Buy, Nationwide is relaxing its lending criteria across a range of its mortgage products aimed at first-time buyers and purchasers of new builds.
Henry Jordan (main image), the lender’s Director of Home, says the lender is increasing the maximum loan-to-value (LTV) available for those looking to purchase a new-build house to 95% on 26 June, as it ramps up support for the housebuilders and the Government’s 1.5 million new homes plan.
Six times income
In addition, first-time buyers will be able to use Nationwide’s Helping Hand to make their new build house purchases. This gives first-time buyers the ability to borrow up to six times their income at up to 95% loan-to-value, which is a third more when compared to Nationwide’s standard high LTV lending at 4.5 times income.
Mortgage new build sales in 2024 were around a third lower than in the last full year of the Government’s Help to Buy scheme in 2022. Deposit requirements and affordability challenges have played a major part in this, and Nationwide’s latest changes will support the new build sector by tackling them.
Nationwide’s support extends to the entire new build sector because, at the same time, it will also be increasing the maximum loan-to-value available for applications involving new build flats to 85% LTV.
A strong housebuilding sector drives growth, and as the UK’s biggest building society, we’re backing it with a trio of positive changes.”
At the same time, it will 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 will give customers and brokers greater certainty and flexibility during the construction process.
Jordan says: “A strong housebuilding sector drives growth, and as the UK’s biggest building society, we’re backing it with a trio of positive changes.
Demand for new-builds
“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.”
These latest changes are a testament to their commitment to the market.”
Adrian MacDiarmid, of Barratt Redrow plc, says: “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.
Welcome step
“Improving affordability and access to homeownership helps underpin housebuilders’ confidence to invest in order to deliver the homes that this country needs.”
Ceri Pearce, UK Sales and Marketing Director, Taylor Wimpey, says: “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.”