The UK’s largest property lender, Halifax, is lowering the deposit required on new-build houses from 1 July. The minimum deposit needed to secure a mortgage on a new-build house falls from 10% to 5%.

Putting a large deposit together is often the biggest hurdle First Time Buyers (FTBs) face in getting on the housing ladder and the announcement will make that significantly easier for many. Based on the UK’s average house price of £289,099, the minimum deposit needed could now be as low as £4,000 for those taking the Shared Ownership option.

Halifax has also removed the requirement that higher Loan to Value new-build loans (above 85%) be built by developers on its panel. This will increase the availability of 5% deposit mortgages to houses constructed by Britain’s 2,000-plus small housebuilders. 

Shared ownership
Shared ownership is an increasingly attractive choice for many of those struggling to get on the housing ladder, particularly where homes are above the national average. By buying part of the property initially and increasing that share at a point in the future, shared ownership is another option for FTBs who find the first step to home ownership difficult.

Halifax will now accept a 5% deposit on both new-build flats and houses in shared ownership schemes run by housing associations. Shared Ownership is available where the share being bought is between 25% and 90% of the property's value. Buyers can now borrow up to 95% of their share of the home with the lower deposit requirement.

Andrew Mason, Head of Strategic Partnerships and Housing at Halifax said, “We recognise that getting a deposit together is still the biggest hurdle faced by most First Time Buyers, and these changes could reduce the minimum deposit required on an average house to as little as £4,000."

“This also underlines our confidence in the new-build market and our support for the UK construction industry. We have worked closely with the industry and listened to their needs to develop these changes.  Just as importantly, supporting new-build homes supports the drive to net zero by making warmer, greener homes more accessible and attainable for potentially thousands of new buyers,” said Andrew.

Photo: Andrew Mason.