Updated mortgage regulations nationwide permit novice homeowners to purchase new construction properties with a small deposit of only 5%.
Freedom's here, buddy! Getting ready to shake things up with the latest on mortgages for first-time buyers? That's right! Nationwide Building Society, known for its mutual love with homebuyers, is jumping on the bandwagon, offering a juicy chance for FTBs (first-time buyers) to snag a mortgage covering up to 95% of the purchase price when buying new-build digs.
Starting Thursday, these mortgage products will be available and do you know what's even sweeter? They'll let you borrow up to six times your annual earnings when you use their Helping Hand scheme for your new-build adventure!
Many loan sharks (oops, banks and building societies) usually demand a minimum deposit of 10% or more when it comes to new builds, as these properties can lose value in the initial years. Nationwide's new policy means that an FTB couple raking in a combined £80,000 could potentially borrow up to £480,000, as long as they've got a 5% deposit and can handle the monthly repayments.
And guess what? Nationwide is generous when it comes to new-build flats too! From Thursday, they're accepting a 15% deposit for new-build flat purchases, down from a previous 20%.
Adding some spice to this mix, mortgage offers on all new builds will be extended to nine months to accommodate potential construction delays, lowering the risk of requiring a fresh mortgage application.
New-build boost: Nationwide is providing 95% LTV mortgages for new-build houses, and they'll cover up to 85% of the property's value for new-built flats!
Nationwide boasts that their Helping Hand mortgage products have supported over 57,000 customers since their launch in 2021, with a staggering 26,000 customers utilizing Helping Hand between April 2024 and March 2025.
New-build sales have taken a hit since the end of the former Government's Help to Buy scheme, which was only available on new builds. Mortgaged new-build sales in 2024 were around one-third lower than in the last full year of the Help to Buy scheme in 2022.
Nationwide believes stiff deposit requirements and affordability challenges have majorly contributed to this downward trend, but they're optimistic that their latest change could help an additional 10,000 FTBs get a foot on the property ladder.
Now, let's dive into why new builds usually require a bigger deposit... Historically, new builds have been considered riskier properties for lenders, much like a new car loses value after hitting the road for the first time. New builds have occasionally seen a dip in value within the initial years of ownership.
'New builds have carried more risk for lenders, especially flats, due to the initial over-valuation risk,' says Ravesh Patel, director and senior mortgage consultant at broker Reside Mortgages. 'There was the perceived risk that the property could depreciate following completion, often with developers' incentives distorting values in the first instance.'
So, there you have it, folks! Step into the world of aggressive mortgage deals and make your property dreams a reality, all thanks to Nationwide Building Society. Don't forget to check out the best mortgage deals! Good luck on your home ownership journey!
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Current trends and influencing factors surrounding 95% loan-to-value (LTV) mortgages for first-time buyers purchasing new build houses in mid-2025 are discussed below:
Trends
- Increase in maximum LTV for new builds by leading lenders Nationwide Building Society has raised the maximum LTV to 95% on new build houses starting June 26, 2025. This move specifically targets first-time buyers and aims to boost the new build housing market amid a decline in transactions compared to 2022. For new build flats, the maximum LTV has been raised to 85%[3].
- Availability of 95% LTV mortgages remains strong but with some rate adjustments Despite some minor monthly fluctuations, mortgage deals at higher LTV tiers such as 95% are widely available. However, some lenders have slightly increased fixed mortgage rates for 95% LTV products, for example, a 0.20% increase on 2- and 5-year fixed rates was observed at Principality Intermediaries [1][4].
- Government initiatives supporting high LTV lending The United Kingdom government has introduced initiatives to encourage lenders to offer 95% LTV mortgages to first-time buyers with just a 5% deposit. The Mortgage Guarantee Scheme, aimed at supporting this, is due to end by the end of June 2025 but has helped maintain availability of such products[2].
Factors Influencing 95% LTV Mortgages for First-Time Buyers of New Builds
- Affordability pressures and deposit requirements Rising deposit requirements and affordability challenges have been major factors contributing to a decrease in new build mortgage transactions since the end of the Help to Buy scheme in England. This has led lenders like Nationwide to raise the LTV limits to support buyers struggling with large deposits[3].
- Lender product innovation to increase borrowing power Nationwide's Helping Hand mortgage product enables first-time buyers to borrow up to six times their income on new builds at 95% LTV, surpassing the typical 4.5 times income limit. This boosts borrowing capacity by around a third for eligible buyers and has been widely used to support over 57,000 buyers since 2021[3].
- Government homebuyer support schemes beyond just mortgages In addition to schemes like the Mortgage Guarantee for 95% LTV mortgages, other initiatives such as Shared Ownership, First Homes discounts, and Lifetime ISAs help first-time buyers accumulate deposits or reduce purchase costs. These collectively shape demand and LTV availability[2].
- Market conditions leading to lender rate adjustments Some lenders have moderately increased mortgage rates, particularly in high LTV tiers, to reflect risk and market conditions. Despite this, some fintech lenders have decreased rates at lower LTV bands. This demonstrates a nuanced lender response balancing risk with the need to support buyers[4][5].
In summary, the key trends in 95% LTV mortgages for first-time buyers of new build homes in the UK are the higher maximum LTV limits by leading lenders like Nationwide. Government schemes such as the Mortgage Guarantee help maintain availability of such products. Affordability challenges post-Help to Buy and lender innovation such as higher income multiples shape access to these mortgages. Mortgage rates have seen mixed adjustments reflecting ongoing market dynamics [1][2][3][4][5].
- The increased maximum LTV for new builds by Nationwide Building Society to 95% is targeting first-time buyers, aiming to boost the new build housing market.
- Government initiatives like the Mortgage Guarantee Scheme are supporting lenders to offer 95% LTV mortgages to first-time buyers.
- Affordability pressures and deposit requirements have contributed to a decline in new build mortgage transactions since the end of the Help to Buy scheme, leading to lenders like Nationwide raising LTV limits.
- Lender product innovation, such as Nationwide's Helping Hand mortgage product, can enable first-time buyers to borrow up to six times their income on new builds at 95% LTV, boosting borrowing capacity.
