"Help to Buy has proven that there is a need to support low-deposit lending. Own New will plug the gap it leaves without reliance on taxpayer funding."
A new a new 95% LTV mortgage scheme for people buying new homes will be launched in the new year.
Own New will launch its 95% mortgage product with Darlington Building Society early next year, alongside more than 50 housebuilders.
Initially available in the North East and Yorkshire, Own New will soon expand nationwide. It will be open to first-time buyers and home movers buying new homes.
Own New was designed by Market Mortgage to help homebuyers who can afford repayments, but don’t have a ‘bank of mum and dad’ or other source to lean on for a deposit.
Own New works behind the scenes with lenders to reduce the risk involved in high LTV lending, meaning they can lend to borrowers with a small deposit at competitive rates. The scheme is funded by housebuilders, who pay a small fee on completion of the sale.
There is no cost to the homebuyer. They simply apply for a standard mortgage in the usual way through Darlington Building Society and own 100% of their home.
Eliot Darcy, founder of Market Mortgage, said: “The launch of our first 95% mortgage product comes as Help to Buy has closed applications and the market is emerging from a difficult period.
“Help to Buy has proven that there is a need to support low-deposit lending. Own New will plug the gap it leaves without reliance on taxpayer funding.
“We are delighted to announce Darlington Building Society as the first lender to join Own New, reflecting its foresight, willingness to innovate and agile structure.
“Darlington’s focus on manual underwriting means each application will be considered by a person rather than an algorithm. This will particularly help people with non-standard circumstances, for example those who are self-employed, have multiple sources of income or who are in the early stages of their career and looking to build a credit rating.
“We look forward to working with Darlington Building Society and more than 50 housebuilders who have joined Own New as we work to create a fairer and more competitive system of mortgage lending.”
Andrew Craddock, CEO of Darlington Building Society, added: “Darlington Building Society has a long history of making people’s dreams of homeownership a reality, and this is particularly true within our local heartland.
“We are always looking for creative ways to help people get onto the property ladder, and this is particularly important now as the Help to Buy scheme comes to an end.
“As costs for all of us continue to increase, raising large deposits is out of reach for many. Our partnership with Own New is an exciting opportunity for us to combine our award-winning mortgage proposition with their innovative solution for borrowers with low deposits, so we can continue to make homeownership accessible.
“Darlington Building Society’s manual underwriters ensure that a person reviews applications, not a computer, to apply common sense to each individual case and help more people into homes of their own.
“Furthermore, Darlington Building Society is serious about climate change. We are looking at how we can promote a greener housing market through our mortgages. A new build property is built to be more energy efficient which helps protect the environment as well as benefiting homeowners with cheaper energy bills.”
