Nationwide increases amounts it will lend to first-time buyers
Nationwide increases amounts it will lend to first-time buyers up to five-and-a half-times borrowers’ income with a 10 per cent deposit
- UK giant Nationwide will increase the amount that it lends to first-time buyers
- Those with 10% deposits will be able to borrow five times their income
- Products will have same rates as Nationwide’s current standard mortgage range
Lending giant Nationwide today announced that first-time buyers with deposits as low as 10 per cent will be able to borrow five and a half times their income when taking out a longer-term mortgage.
Britain’s biggest building society said that under its ‘helping hand’ initiative, first-time buyers across the country will have the option when taking out a five or 10-year fixed-rate mortgage at up to 90 per cent loan-to-value (LTV).
The initiative will launch on April 26 and products will have the same rates and features as Nationwide’s current standard mortgage range.
The change would mean, for example, that a couple with a joint income of £50,000 would be able to borrow up to £275,000, rather than £225,000 previously, assuming a 10 per cent deposit and no other costs impacting affordability.
Nationwide said there will be £1billion of helping hand mortgage lending available to support more first-time buyers on to the property ladder, meaning thousands of aspiring buyers will be helped.
Nationwide announced that first-time buyers with deposits as low as 10 per cent will be able to borrow five and a half times their income when taking out a longer-term mortgage (stock)
Nationwide tells staff ‘you can work ANYWHERE’: Britain’s biggest building society will give 13,000 office workers ‘more control of their lives’ under huge WFH plan
Nationwide has given its 13,000 office workers the choice of deciding where they want to work in order to give them more control over their lives under a huge work from home plan.
The lending giant said it will put office staff in control of deciding where they are based according to their job once the latest Covid-19 restrictions end, after more than half – 57% – said they wanted to work from home full-time.
More than a third – 36% – said they preferred a mix of home and office-based work.
Under the plan, Nationwide is leaving three offices in Swindon, with 3,000 staff either moving to the nearby HQ, working from home, or mixing the two. All three offices are based just outside Swindon town centre, in Aspect Park and Windmill Business Park.
Other UK staff may be able to work from their local High Street branch if they prefer, rather than travel to offices.
The society said that in the past 10 years the average price of a first-time buyer property has increased by 41 per cent, while the average income has risen by 18 per cent.
First-time buyers benefit from £500 cashback on completion of their mortgage.
Applications will still be subject to robust underwriting checks, Nationwide said, including full assessment of credit scores and additional credit commitments, to ensure the society continues to lend responsibly.
The scheme will be available to applicants who are employed but not those who are self-employed.
Mortgages are portable if people move house within their initial deal period. If people wanted to borrow more this would be subject to full assessment.
Henry Jordan, director of mortgages at Nationwide Building Society, said: ‘Nationwide was founded to help people into homes of their own and that remains the case as much today as it did 135 years ago.
‘In the UK there are nearly five million private rented households, but many of these renters have dreams and aspirations of buying a home of their own.
‘However, with household incomes rising at a slower rate than house prices, many first-time buyers are finding it increasingly hard to get onto the property ladder.
‘Our new helping hand option supports borrowers in meeting the affordability requirements, making it easier for them to buy a home of their own.’
The announcement was made in the week that several high street giants returned to 5% deposit mortgage lending under a new UK Government guarantee scheme.
Lenders including Lloyds, HSBC UK, NatWest, Barclays, Santander and Virgin Money are taking part in the scheme.
The choice of low deposit mortgages on the market plunged in the early days of the coronavirus crisis as lenders became cautious about ‘riskier’ loans.
Nationwide said it is focusing on its 10 per cent deposit offering.
Yesterday a scheme opened which allows first-time buyers will be able to get Government-backed mortgages with deposits of just 5 per cent from five major banks and building societies.
The scheme, which is also open to current homeowners, was first announced in the Budget and will see lenders advance 95 per cent of the purchase price on homes worth up to £600,000.
The Government will underwrite the mortgages in order to give lenders the confidence to offer loans with such low deposits.
Lloyds, Santander, Barclays, HSBC and NatWest so far are all offering the loans, while Virgin Money will begin offering them next month.
This is the first time that all the big banks have offered mortgages with 5 per cent deposits since May 2020.
The scheme will be open to new applications until 31 December 2022, and people from every country in the UK will have access to them.
Borrowers will have the choice of 38 new mortgages under the Government guarantee scheme, according to Defaqto.
The best guaranteed two-year fix is from Natwest, which is offering a rate of 3.90 per cent without a fee.
For those seeking a five-year fix, the three most competitive rates are all on a mortgages that do not come under the Government guarantee scheme.
Coventry Building Society is offering the best buy deal at 3.89 per cent with a £999 fee. The best deal under the Government scheme comes from Natwest which has a five-year fixed rate of 4.04 per cent without a fee.
This is the first time that all the big banks have offered 95% LTV mortgages since May 2020
Other lenders have already launched 5 per cent deposit mortgages independently of the Government scheme. These include Bank of Ireland, Coventry Building Society and Accord, part of Yorkshire Building Society.
The Government said its figures showed that demand for home ownership had soared during lockdown, with nearly 80 per cent of private renters now saving for a deposit.
However, first-time buyers and those with low deposits have struggled to get on the ladder after many lenders pulled their 5 per cent and even 10 per cent deposit mortgages at the beginning of the pandemic.
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