Newcastle for Intermediaries has announced a significant policy shift that raises the maximum loan-to-value ratio on new build flats to 90%.

The change allows borrowers to secure a mortgage from Newcastle Building Society for a new build flat with just a 10% deposit, aligning it more closely with the lender’s policy on new build houses, which was increased to 95% LTV earlier this year.

The society said the move is designed to support the UK’s housebuilding sector by expanding mortgage access to younger and first-time buyers who may be struggling to build up a large deposit.

It follows other recent changes by the mutual, including a reduction in its residential stress rate for mortgages with terms of up to five years — a decision intended to ease affordability pressures and widen access to home ownership.

BROADER STRATEGY

Franco Di Pietro, head of intermediary mortgages at Newcastle Building Society, said the decision formed part of a broader strategy to reduce barriers to home ownership and meet growing demand for modern, energy-efficient housing.

“By raising our LTV on new build flats to 90% and having already extended up to 95% on new build houses earlier this year, we’re reducing the deposit barrier that many borrowers face, while broadening access to the modern, energy-efficient homes our borrowers want,” said Di Pietro.

“We’ll continue innovating our products to ensure we meet the challenge of affordability, so that more aspiring home buyers or people looking to make their next move can do so with confidence.”

The change has been welcomed by brokers working in the new build space. Mark Pender, director at the Mortgage Advice Bureau New Homes, said the updated policy would offer greater choice to buyers and signalled a continued commitment to supporting the sector.

“This and other recent policy changes introduced by Newcastle Building Society represent a positive development within the new build market.

“By enhancing accessibility to new build flats across the UK with lower deposit requirements, they are creating greater opportunities and flexibility for our clients,” he said.

“This move reflects the lender’s continued commitment to supporting key segments of the housing sector, which we are actively encouraging across the lending community.”