Halifax has boosted its support for the new build sector by upping loan-to-values (LTVs) on its mortgage range.
The lender’s LTV cap has been raised from 80 per cent to 85 per cent on all new build house and flat purchases.
A managed panel of builders and brokers will remain for borrowers who wish to apply for a standard 85 to 95 per cent mortgage.
Halifax has also increased the LTV for those buying a new house or flat with a registered provider or housing association through a shared ownership scheme from 80 per cent to 90 per cent.
The news comes shortly after Virgin Money bolstered its support for the new build sector with a range of products to support custom build and shared ownership borrowing.
Douglas Cochrane, head of housing development at Lloyds Banking Group, said: “The new build sector continues to be central to the success of the UK housing market, and helping to provide greater choice and access to mortgage products is fundamental to supporting its longevity.
“Through Lloyds Banking Group’s Helping Britain Prosper plan we have committed to lending £10bn to first-time buyers this year, and the changes to our shared ownership lending policy will help us support this goal.
“Providing a broader range of options will help brokers meet more of their customers’ needs, and together with market leading policy and product support, helps underline the added value of our specialist housing development team.”
Jane King, mortgage adviser at London-based Ash-Ridge Asset Management, said Halifax was catching up with some of the other lenders on new build.
“The minute you put the key in the lock of a new build it becomes second hand, which means you lose 5 per cent of the value,” she said. “That is why lenders wanted the comfort of a large deposit.
“That is not the case anymore and prices are stabilising. Quite a lot of lenders do 90 per cent for shared ownership. Leeds does 95 per cent on new build.
“They are catching up with other people and deciding [new builds] are not quite so risky anymore.
"Otherwise they would be losing a big chunk of the market, because there are so many new build flats.
“Halifax will capture quite a bit of the market with this. They could get a lot of my shared ownership business.”
simon.allin@ft.com
