Virgin Money has boosted its support for the new build sector with a range of products to support custom build and shared ownership borrowing.
The lender has launched three-year trackers at 80 per cent and 85 per cent loan-to-value (LTV) for custom build borrowers, with rates of 4.79 per cent and 4.99 per cent respectively.
The loans come with a £1,995 product fee and allow customers to transfer to a new product following the completion of their new home without incurring an early repayment charge.
Customers also stand to save £1,300 on average in upfront costs because Virgin does not pass on the charge for indemnity insurance.
Virgin’s entry into the market comes after extensive government backing for the custom build sector, including the setting up of the £1bn Housing Development Fund in 2015.
For Virgin to put their weight behind this is vital to the success of the custom build sector.David HollingworthThe lender has also launched a selection of two and five-year fixed rate products for the shared ownership market.
Options include a two-year fixed rate at 85 per cent LTV with a rate of 1.84 per cent and a £995 product fee.
Two-year fixes are also available at 2.44 per cent up to 85 per cent LTV and 3.69 per cent up to 90 per cent LTV, with no product fee attached.
A five-year fix is available at 2.34 per cent up to 85 per cent LTV with a £995 fee, while fee-free options are available at 2.89 per cent up to 85 per cent LTV and 4.29 per cent up to 90 per cent LTV.
All of the shared ownership options come with £300 cashback.
Peter Rogerson, Virgin Money’s director of mortgages, said: “Virgin Money is committed to getting Britain building and helping more people achieve their dream of home ownership.
“We are delighted to be the first mainstream lender to launch a custom build proposition, as we want to offer more choice in an under served section of the market that has huge growth potential.
“Our new shared ownership range will support customers with a more affordable route into home ownership, giving people access to property who might otherwise be excluded.”
David Hollingworth, associate director of communications at London & Country Mortgages, said: “For Virgin to put their weight behind this is vital to the success of the custom build sector. To see it get any real take-up, we need to see more lenders going into that sector and looking to support it.
“Self build contracted quite substantially following the financial crisis, and we will see if this kick starts a return – particularly given the government’s backing for it.”
simon.allin@ft.com
