Nationwide will lower minimum deposit needed by first-time buyers to 10 per cent from July 20
Tuesday 14 July 2020 1:43 AM UTC
LONDON July 14: Nationwide Building Society will lower the minimum deposit it requires from first-time buyers to 10 per cent from July 20.
It follows the Government’s announcement last week that people getting on or moving up the housing ladder will pay no stamp duty on the first £500,000 of their purchase when they move home.
The stamp duty holiday, which applies to England and Northern Ireland, will last until March 31, 2021.
Back in June, Nationwide placed a ceiling of 85 per cent loan-to-value (LTV) on mortgage lending to new customers in a move it described as ‘prudent’ – meaning they would need a deposit of at least 15 per cent.
But amid signs that housing market activity is increasing, Britain’s biggest building society said its new 90 per cent LTV mortgages for first-time buyers will provide further support.
It said that there will be no set limit on the number of home loans available to customers.
There are some conditions alongside the new low deposit loans though. The property must be a house, which is at least two years old.
The maximum mortgage term is 25 years and applicants will be subject to enhanced credit scoring criteria, to make sure the loan is affordable.
Nationwide’s own figures suggest nearly four in five first-time buyers purchase a house or a bungalow, rather than a flat.
The society continues to offer mortgages on new-build homes through the Help to Buy scheme.
Nationwide said it hopes the Government’s temporary stamp duty cut will inject more energy into the housing market ahead of the holiday season, with first-time buyers now able to save up to £10,000 when moving into their first home.