Santander will lift the maximum loan-to-value ratio on new build houses and flats to 95% next week, which means that these borrowers will need to find a 5% deposit to buy a home.
The bank adds that it will also lift the maximum LTV for buy-to-let new build flats to 75%.
The lender currently offers borrowing up to a maximum of 85% LTV for new build houses and 80% LTV for new build flats.
Details of the move, which comes to market on Tuesday (27 February) include:
- Standard residential new build house LTV will rise from 85% to 95%
- Standard residential new build flat LTV will rise from 80% to 95%
- Shared Ownership new build house LTV will rise from 85% to 90%
- Shared Ownership new build flat LTV will rise from 80% to 90%
- BTL new build flat LTV will rise from 70% to 75%
Customers buying a new build with a 95% LTV mortgage will be able to select from the bank’s current 95% range of five-year fixed-rate products.
Santander head of development, mortgages, Graham Sellar says: “Our change will not only help more buyers get onto the property ladder sooner but also, with the majority of new build properties achieving an energy performance certificate rating of A or B, support the wider transition to greener living.”
The move coincides with the start of the 2024 New Home Weeks, the annual campaign run by the Home Building Federation.
Home Building Federation executive director David O’Leary adds: “Santander’s introduction of 95% mortgages for new build homes is extremely welcome. Most sensible observers recognise that there is a huge shortage of homes and it’s becoming harder for younger households to step into homeownership.”
Barratt Developments head of mortgage lender relations points out: “The increase in loan to values is a testament to Santander’s support for the new build market and to their commitment to addressing not just the challenge of first-time buyers aspiring to own their own home, but also our collective responsibility to support the transition to a lower carbon economy.”
The initiative from Santander comes as Virgin Money and Halifax will next week introduce reduced mortgage rates for new-build customers, teaming up with Own New as a launch partner for its Rate Reducer product.
For some homes, Virgin Money’s introductory two-year mortgage rate of 4.79% with a £995 fee at 65% LTV will be cut to 0.99% at 60% LTV with a £495 fee.
