Residential mortgage lender Gen H has announced the launch of New Build Boost, a new mortgage scheme aimed at buyers with small deposits and no access to family help.
Since the end of Help to Buy, approximately 30,000 fewer households access new build homeownership each year.
To combat this, the New Build Boost mortgage scheme is made of three parts: The buyer brings a minimum 5% deposit, they take out an 80% LTV mortgage with Gen H, who then closes the gap with a 15% interest-free boost supported by the house builder.
New Build Boost buyers will get access to Gen H’s standard 80% LTV mortgage lending criteria.
The structure of the boost mirrors Help to Buy – it is an equity loan, the value of which increases or decreases with changes in the house price – but comes with a number of borrower-friendly design changes.
The boost is interest-free for its entire term, which can run for the full duration of the mortgage. This avoids the payment shock that Help to Buy customers encountered if they were unable to redeem their equity loan after the first five years.
The borrower also has the right to repay the boost (in whole or in part) at face value for the first five years. At the five-year mark, the value of the boost will step up or down to reflect changes in the property value to date. The amount to be repaid under the boost is capped at 2x the original amount to protect homeowners in the event of outsize house price growth.
Lastly, where Help to Buy was a second charge mortgage that required separate coordination with the mortgage lender and the administrators of the Help to Buy scheme, New Build Boost brings the whole customer experience together under one roof: one application, one online account from which to manage home finances, and the flexibility to make boost repayments at any time with digital property valuations.
New Build Boost will be available on any plot at eligible sites from exclusive launch partners Persimmon. There are over 120 participating sites across England for launch.
To benefit the widest possible audience, Gen H will be opening the scheme to all house builders to join, while also inviting other lenders to sign up to make their mortgage products available under the scheme.
Will Rice, founder and CEO at Gen H, commented: “The housing crisis that our country faces can only be solved by building more new homes and ensuring that suitable financing solutions are available for people to buy them. We have designed New Build Boost to open up homeownership to a wider audience – especially those who are not fortunate enough to have access to family support – while also giving home builders the confidence to ramp up the delivery of new homes to market.
"We applaud the ambition and urgency shown by the government to tackle the housing market’s structural problems. New Build Boost is our rallying cry to the private sector to raise its game and show that it too can be a part of the solution.”
Sonia Da Costa, chief customer experience officer at Persimmon Homes, said: “Given the ongoing challenge of affordability for many young families in particular, we are always looking for ways we can help make the dream of home ownership more accessible. We are delighted therefore to partner with Gen H to offer this opportunity to potential buyers, supporting them on their journey to new home ownership.”
Oliver Peace, founder and managing director of James Leighton Financial Services, added: "Gen H’s New Build Boost is a standout example of mortgage market innovation. Many potential buyers face two major barriers: insufficient borrowing power and a lack of deposit. Since the closure of Help to Buy Shared Equity in October 2022, no other product has addressed both challenges at the same time—until now.
"By enhancing affordability, this product will help many buyers who previously struggled to secure the home they need. While lending remains subject to Gen H’s policies, credit status, and overall suitability, this could provide a valuable new route to homeownership for first-time buyers and home movers alike."
