Newcastle Intermediaries has unveiled its maiden suite of two, three and five-year fixes for the soon to be constricted Help to Buy market.
The range only applies to the equity loan scheme for new-build properties, as the mortgage guarantee element of the scheme will stop at the end of the year. The Help to Buy Isa remains unaffected.
Highlights of the range include a two-year fix to 60 per cent loan-to-value (LTV) at 1.59 per cent with a £999 product fee or 1.99 per cent fee free.
There is also a remortgage product, fixed for three years at 2.35 per cent to 75 per cent LTV. The lender said the deal is aimed at borrowers with their initial Help to Buy mortgages maturing.
The five-year fixed rate deals include a loan at 60 per cent LTV, priced at 2.45 per cent with a £698 product fee or 2.79 per cent fee free.
At 75 per cent LTV, five year fixes are priced at 2.65 per cent with a £698 product fee or 2.89 per cent fee free.
Products in the range include free valuation and £300 cash back, with the added benefit of overpayments up to 10 per cent permitted without penalty.
The lender is offering Help to Buy through a selection of key partners: Sesame, Openwork, L&G, Mortgage Advice Bureau, Intrinsic, First Complete, Pink Home Loans, The Mortgage Alliance, Premier Mortgage Services, SimplyBiz Mortgages, Brilliant Solutions and Tenet.
Provider view
Steve Carruthers, head of mortgage distribution for Newcastle Intermediaries, said: “2016 has been a year of significant enhancements to the Newcastle Intermediaries proposition. Our launch into the Help to Buy equity share scheme further signifies our support and commitment to our broker partners, helping clients purchase their new build home, both as a first-time buyer or subsequent mover. We’re also pleased to support existing Help to Buy customers with more choice at the end of their current deals, through our Help to Buy remortgage offering.”
Adviser view
Dan Clayden, director at Devon based Clayden Associates, said: “I think the Help to Buy scheme for new builds is a great initiative but there is an argument that it drives the cost of these properties higher because it generates a greater demand. I do not think that the prices of properties here in the south-west have changed dramatically over the past decade, but the same cannot be said in areas in the south-east and London.
He added: “The simple solution for people struggling to get onto the property ladder is to build more homes but the issue is there is only so much free space in this relatively small island. Also, one of the things people value most in the UK is the vast amounts of open space.”
“The proliferation of high LTV loans have been particularly beneficial to first-time buyers because we had a period following the financial crash where lenders were simply not lending.”
Charges
Ranges from £0 to £999.
Verdict
A lot has been said about the perils of would be first-time buyers in the post financial crash mortgage environment. Thankfully, a number of initiatives, including the Help to Buy scheme, has made the market more accessible to them. However, the issue of saving for a sizeable deposit persists. Yes, the scheme allays this issue somewhat but house prices are still incredibly steep in some areas of the UK - especially London.
To take advantage of the Help to Buy scheme, borrowers are required to accrue a 5 per cent deposit. Five per cent of a flat that costs £300,000, for example, is still a relatively substantial sum of money.
