The recently announced Deposit Unlock scheme, developed with the Home Builders Federation and its members, aims to allow buyers to secure a new-build home up to a value of £330,000 with a deposit of just 5%. House-builders will pay the cost of insuring mortgages through a percentage of income from house sales.
The scheme will be piloted on selected plots in the North East of England through four house builders with Newcastle Building Society being the first lender to be involved in the scheme.
Commenting on the launch of the scheme, Paul Broadhead, Head of Mortgage & Housing Policy at the BSA said:
"Deposit Unlock is a great example of a private sector initiative which addresses an important social challenge – helping people to buy their own home. This support for higher loan to value lending on new homes will be particularly helpful for younger buyers who often struggle to save for a deposit while paying rent at the same time. Our research shows that raising a deposit is now the single biggest barrier to would-be buyers. Building societies are synonymous with home ownership and it is good to see Newcastle Building Society leading the way as the first lender to sign up. I am confident that more will follow.”