Newcastle Building Society has announced a range of mortgages that offer 95% LTV on new-build properties.

The society’s Deposit Unlock scheme starts at 3.50% for a two-year fixed rate mortgage.

The mortgages, the first made available under the pilot initiative which helps low deposit buyers purchase a new-build home, are initially available on selected plots in the North East of England through four participating house builders – Barratt Developments, Bellway, Keepmoat and Vistry.

Newcastle Building Society confirmed that a five-year fixed rate is also available at 3.75%, with both products fee-free and coming with a free valuation to further support low-deposit borrowers.

The society’s chief customer officer, Stuart Miller, said: “We need to help provide more options for low-deposit borrowers looking to buy a new-build home. Deposit Unlock is a truly innovative initiative and we’re pleased to be the first lender to offer products under the scheme.”

IMLA executive director, Kate Davies, said that the launch of Deposit Unlock is a “positive step forward” in the provision of low-deposit lending.

Davies added: “The government’s announcement that its Help to Buy Equity Loan scheme would be withdrawn in 2023 signalled a clear need for viable alternatives like these, to help more people step onto the property ladder, as well as progressing up it.

“There are, of course, other providers developing innovative schemes aimed at providing an alternative to Help to Buy. IMLA is pleased to have been able to facilitate discussions between providers and members and we are delighted that one of our members - Newcastle Building Society – is the first to launch with Deposit Unlock.  We wish it every success.

“It will be interesting to see how this launch encourages and stimulates other providers and lenders to continue to find creative solutions to the challenges faced by buyers. Growing competition in this area can only benefit consumers, as they seek products which fit their individual needs.”

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