Halifax To Offer 95% New Build Mortgages

Halifax have announced that they are to increase their maximum loan to value (LTV) for new build mortgages to 95%.  This is to be introduced from the 1^st July 2022.  The change applies to new build houses and bungalows whereas the maximum will remain at 85% LTV for new build flats.

The 95% mortgages are to be made available through the government’s Mortgage Guarantee Scheme first introduced in 2021.  Due to this there are certain elements of criteria that still apply, namely:

• Minimum personal 5% deposit is required
• Any product fees cannot be added
• The property must be the applicants only residence and they must not have an interest in any other properties such as second home or buy-to-let
• Maximum loan amount is £570,000
• A maximum of 4.49x loan to income (LTI) will apply in regard to affordability
• All current credit commitments will be taken into consideration with affordability regardless of them being advised of being repaid on completion

Saving for a deposit is voted as one of the main obstacles for first-time buyers entering homeownership and with new builds being more prominent in the housing sector due to the shortage of second hand/resale properties being available, this criteria change will be welcomed by many.

Halifax will now also accept 5% deposits on new build flats and houses for Shared Ownership giving the ability to borrow up to 95% of the applicants share.  This change will apply to new builds and second hand properties.

Andrew Mason, head of strategic partnerships and housing, at Halifax, said: “We recognise that getting a deposit together is still the biggest hurdle faced by most first-time buyers, and these changes could reduce the minimum deposit required on an average house to as little as £4000.”

“This also underlines our confidence in the new build market and our support for the UK construction industry. We have worked closely with the industry and listened to their needs to develop these changes.

“Just as importantly, supporting new build homes supports the drive to net zero by making warmer, greener homes more accessible and attainable for potentially thousands of new buyers.”