Deposit Unlock mortgage scheme launched across UK

The house building industry led mortgage scheme, Deposit Unlock, has launched across the UK today.

This follows a successful regional pilot and will allow new build buyers to purchase a house with a 5% deposit, nationally with 17 major builders.

The mortgage indemnity scheme has been developed by the Home Builders Federation (HBF) and 17 of its largest members, alongside Homes for Scotland (HFS) and Deposit Unlock’s scheme manager, Gallagher Re. It will be available on developments across England, Scotland and Wales and is open to all HBF and HFS members, with more builders expected to be added in the coming weeks.

Deposit Unlock aims to help open the new build market to more borrowers who do not have access to large deposits, and help soften the blow of the withdrawal of the Help to Buy Equity Loan scheme. Help to Buy has assisted more than a third of a million households to purchase a new build home since its launch in 2013.

Upon completion of home purchases offered as part of the Deposit Unlock scheme, the developer will fund a mortgage indemnity and deposits cash to cover any potential losses. The scheme reduces risk for the lender, protecting them from a proportion of the potential loss in the event of any default.

HBF executive chairman, Stewart Baseley, said that ensuring people can buy a new build home is “key” to the industry’s ability to deliver the government’s housing ambitions.

“Too many people are unable to realise their ambition of home ownership because they simply can’t afford the deposit required,” Baseley commented.

“The industry has worked hard to develop a sustainable solution that will help more prospective buyers onto the housing ladder, maintain demand and so enable builders deliver more desperately needed homes.

“This launch is testament to the foresight and investment made by 17 of our members. We are also grateful for the commitment shown by our two launch lender partners and look forward to welcoming others in the coming months.”

Nationwide is the latest major lender to sign up to Deposit Unlock and will offer the product on new build properties for both first-time buyers and second steppers up to £750,000. Newcastle Building Society, which was the first lender to offer Deposit Unlock nationally following a successful trial in the North-East, has recently seen the first completions under the scheme.

Newcastle Building Society chief customer officer, Stuart Miller, said: “Deposit Unlock is a true innovation and great example of collaboration across the industry to help more people achieve the dream of home ownership. That ambition is now paying dividends as we’re seeing the first completions and I take a real sense of pride in the fact that families are now living in homes purchased through Deposit Unlock.”

Nationwide head of new build, Andy Dean, added: “Raising a deposit continues to remain one of the biggest challenges facing those looking to move into their first home or on to their next. That is why we are pleased to be supporting Deposit Unlock and it’s great to see that it is now being rolled out nationally, providing a real boost to the new build sector.”

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