A group of UK housebuilders have joined forces with lenders and asset managers to launch a new initiative aimed at making homeownership more accessible in the wake of Help to Buy’s withdrawal.
Barratt Redrow and Persimmon have partnered with real estate asset manager QSix and regulated mortgage lender Ahauz to create the Rezide Equity Loan – a new, second charge loan product supported by Barclays and TSB.
The scheme will initially be available to buyers purchasing new homes from Barratt Redrow and Persimmon across England.
SMALL DEPOSIT
The Rezide Equity Loan is designed to reduce the upfront costs of buying a home by allowing purchasers to put down just a 5% deposit.
A further 15% of the property’s value – up to a maximum of £100,000 – will be covered by the equity loan, with the remaining 80% funded through a mortgage from Barclays or TSB.
The loan is regulated by the Financial Conduct Authority and carries a fixed 4% interest rate for the duration of the term.
It is non-amortising and has no early repayment charges, meaning borrowers can repay it at any time or upon selling their property. The repayment amount will move in line with the property’s market value.
The partners said the scheme will support both first-time buyers and movers who might otherwise struggle to meet deposit and income requirements for new-build homes. It is also intended to stimulate development and support the government’s housing delivery goals.
“We’ll be accepting applications for this unique proposition from day one and hope it helps make that dream home a reality for many”
Lee Chiswell, head of mortgages at Barclays UK, said: “Barclays has been focused on making home ownership more affordable for first-time buyers and movers, introducing various enhancements to our new build proposition in the last year, and we’re delighted to join this initiative and help yet more people get on the property ladder.
“We’ll be accepting applications for this unique proposition from day one and hope it helps make that dream home a reality for many.”
INNOVATIVE SOLUTION
Craig Calder, secured lending director at TSB, added: “At TSB, we’re pleased to support this innovative new mortgage solution so we can help more customers make their money go further.
“Whether you’re buying your first home or making a fresh start, this is a great new way to help open the door to property ownership and our specialist new build team at TSB are on hand to support you.”
TACKLING AFFORDABILITY
Adrian MacDiarmid, head of mortgages at Barratt Redrow, said: “Affordability remains a big challenge for many people – not just first-time buyers but also growing families looking to trade up or people wanting a smaller home coming out of a relationship.
“Since Help to Buy ended many people have felt home ownership is beyond them.
“This is why we have worked across the industry to design a mortgage for people to buy a new build property with just a 5% deposit – helping make the home ownership dream a reality for them.”
OPPORTUNITY KNOCKS
Edward McCoy, group sales director at Persimmon, added: “Persimmon is always looking for new ways to improve customers’ opportunities to buy a home.
“We therefore welcome the launch of the new Rezide Equity Loan scheme, as it will add another useful product that enhances affordability.
“We look forward to welcoming many new homeowners through this innovative new product.”
And Matthew Northover, chief investment officer at QSix, said: “The Rezide Equity Loan has been designed to replace the previous Help to Buy scheme and widen access to homeownership.
“By helping to lower affordability constraints for homebuyers, the new scheme will enable housebuilders to accelerate new developments and meet the government’s objectives for new homes.”
