Leeds Building Society (LBS) has refreshed its help-to-buy equity (HTB1) range and added new cashback deals at different loan to value (LTV) levels.
The building society said it is responding to broker feedback regarding the simplification of its help-to-buy proposition.
Also, the lender added that it was responding to the current pressures facing the remortgage conveyancing market, which is seeing a huge demand as a result of the raft of free legals that providers are offering.
The cashback is intended to give borrowers the option to choose their own conveyancer and potentially speed up the process.
HTB1, which is the first part of the help-to-buy mortgage scheme, launched on April 1, 2013 and available until 2020, is an equity loan scheme. It is open to first-time buyer and homemovers – but is restricted to new-build homes.
The LBS product offering includes:
An introduced only two-year fixed-rate HTB1 equity cashback mortgage at 1.74 per cent, valid up to and including 31 October 2019.
An introduced only three-year fixed-rate HTB1 equity cashback mortgage at 2.29 per cent available at up to 80 per cent, which is valid up to and including 31 October 2020, while the second 2.29 per cent mortgage available at up to 75 per cent LTV is valid up to and including 31 October 2022.
All three come with £500 cashback, free standard valuation on properties worth up to £1m, and no completion fee.
LBS’s new offering will also be welcomed by those looking to remortgage in a market that has been criticised for not having enough products.
Brokers have brought up concerns about first-time buyers who buy their homes under the HTB1 scheme, then at the point of remortgage find there is little choice with the number of lenders offering deals.
Provider view:
Jaedon Green, Leeds Building Society’s director of product and distribution, said: “We were the first lender to accept HTB remortgage applications. Our three-year deals are particularly popular with existing HTB homeowners looking for a new deal which runs for the remainder of the interest free period of their government equity loan.
“The society offers a choice of incentive deals to suit borrowers’ individual needs and we’ve added £500 cashback to the latest deals to give brokers and their customers more flexibility."
Adviser view:
Bob Riach, managing director at Riach Financial Advisers, said: "It’s nice to see that a lender has come into the marketplace, while its rates look competitive. The cashback can be a bonus if it gives the client the opportunity to use their own solicitor, as long as the solicitor will do the work for £500 and that the cashback will come on completion.
"The question I have is whether the cash paid will be received on or after the completion date, as cashback is typically received within 30 days of completion."
Charges:
No completion fee.
Verdict:
The HTB market has attracted people who have been desperate to get on the property ladder, but the drawback some have found is the lack of products available when they want to remortgage. At the same time, as more and more lenders add free legals to their arsenal of mortgage products, it is in turn leading to the unintended consequences that many conveyancing firms are now backlogged. In the past few weeks one or two large lenders have moved away from offering the free legals to providing cashback instead to tackle this, but its value will be in the customer getting the cashback at the time they need the money, during the completion period.
