2-April-2018
Author: Carol Bragg
If you’re looking for your first home and have your sights set on a new build, there’s good news: lenders are targeting the new-build market and the number of deals available is rapidly increasing. With the low interest rates, banks and building societies have had to improve their offers in order to compete for business in this market, so there are plenty of incentives to choose from.
Barclays has just relaxed its requirements on deposits for new build mortgages, from 15% to 10% on properties priced up to £500,000 – this matches Skipton Building Society, Leeds Building Society and Clydesdale Bank.
Nationwide has introduced a new pilot scheme to speed up valuations on new builds which uses information already gathered on earlier visits to the site. Further, those borrowers who have mortgage offers valid for six months now have an additional 45 days if the construction of their new home is delayed.
Similarly, Natwest has extended the validity of its mortgage offers on new builds, giving buyers a full year to complete the deal, on the buyer’s request.
Industry experts think that lenders are focusing on new-build buyers as a growth area, after the decline in the buy-to-let market. A wave of government assistance is contributing to the growth, with Oxfordshire, Greater Manchester and the west of England enjoying £300 million in funding towards the cost of nearly 350,000 homes. First time buyers have also been able to take advantage of schemes such as Help to Buy and the Lifetime ISA, giving them a 25% government bonus on their savings towards their deposit.
Whilst the base rate, which impacts mortgage rates, rose for the first time in a decade in November, rates are likely to stay low for the time being. The Bank of England’s Monetary Policy Committee met last week and voted by a majority of 7-2 to maintain the Bank Rate at 0.5%. Although the Committee forecast ongoing tightening of monetary policy, it stated that any future increases in the Bank Rate would likely be made at a gradual pace and to a limited extent.
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