The deposit unlock program allows you to buy a new build home with a 5% deposit

HOMEBUYERS can climb the real estate ladder with a 5% down payment, through a new program that offers mortgages on new construction properties.

The Deposit Unlock Plan is for first-time and second-step buyers purchasing a new construction property worth up to £750,000.

Aspirational homebuyers can purchase a property with a down payment of 5%.


Aspirational homebuyers can purchase a property with a down payment of 5%.Credit: Getty

After a successful trial earlier this year, the program kicked off nationwide this week and now 17 major builders have signed up.

Nationwide was the first major mortgage lender to sign up for the program. It will provide mortgages worth up to 95% of the property’s value.

The Newcastle Building Society is now offering the scheme nationally and more lenders are expected to join in the new year.

Deposit Unlock is aimed at helping people looking to buy a newly built property who only have a small down payment.

The scheme will be welcomed by buyers who are having a hard time keeping up house prices increase.

According to the Office for National Statistics (ONS), house prices in the UK rose 8% in the year to July, to an average of £255,535.

The increase was even greater in the northeast, where the average price rose 10.8%.

But that doesn’t dampen buyer interest. About 73,740 real estate transactions were completed in July as people looked to take advantage of the drop stamp duty rate.

Indeed, The Sun’s My first house series about young people who tried to buy a real estate despite all the challenges.

Nationwide will provide mortgage loans of 95% of the value under the program, with interest rates starting at 2.89%.

The building association will also introduce incentives to encourage people to buy greener homes. It will pay a ‘green bonus’ of up to £500 for those who purchase the most energy efficient properties.

First-time buyers can also get a £500 cashback from the lender.

The scheme can be used to purchase a newly built home or flat on around 1,000 sites across England, Scotland and Wales from homebuilders such as Bellway, Linden Homes and Barratt.

It is expected that many new construction sites will be added in the future.

Henry Jordan, director of mortgages at Nationwide, said: “The need for new homes has never been clearer and we’d love to support the Unlock Deposit program – which gives people with Smaller deposits hope that they can get a house of their own. ”

What is the Deposit Unlock Scheme?

Unlock Deposit was developed by global reinsurer Gallagher Re in partnership with the Home Builders Federation (HBF), a trade body whose members account for around 80% of new homes built in the UK and Wales each year.

It’s a mortgage compensation program, which means the builder has insurance to cover the mortgage provider’s risk that the homeowner may default.

Deposit Unlock was first launched in June of this year on a regional and limited basis as part of a beta.

The pilot scheme is on a number of new construction sites in the North East and mortgages provided by the Newcastle Building Association.

Buyers who want to use this program should talk to the developer of their new construction site to see if they’re a part of it before applying for a mortgage with a lender who’s registered with the program.

Nationwide said the program would provide a “much-needed alternative” to people looking to buy a new home after Help to Buy an Equity Loan Program ends in March 2023.

It follows the launch of the government’s Mortgage Guarantee Scheme in May, which also aims to incentivize lenders to offer higher value mortgage loans.

These schemes all aim to help tackle the UK’s housing crisis and make buying a home more viable for savers.

While the government has said it will build 300,000 homes a year to try to address shortages across the country, many experts say the number is not enough to fill the gap.

Neil Jefferson, executive director at the Home Builders Federation, added: “Unlocking deposits will help households move up the wealth ladder and give developers the confidence to invest in land and labor to build on the huge increase in housing supply in recent years.”

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Bobby Allyn

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