Barratt Redrow and Persimmon have worked alongside real estate asset manager QSix and FCA-regulated mortgage lender Ahauz to create a new homebuyer initiative that requires a deposit of just 5%.
Named the Rezide Equity Loan, this second charge loan product is open to first-time buyers and home-movers, and complements the 5% downpayment with 15% of the property’s market value (up to a maximum loan amount of £100,000). The remaining 80% of the purchase price will be financed through a mortgage from Barclays or TSB.
The loan product is non-amortising and has a fixed interest rate of 4%, payable over the entire term of the loan. The repayment value of the Rezide Equity Loan will adjust up or down, in the same proportion as any changes in the underlying home’s value, and there are no early repayment charges.
Rezide Equity Loan will initially be exclusively available to buyers of Barratt Redrow and Persimmon homes, with plans to roll out the scheme across England.
This collaboration aims to assist plug an affordability gap that has led to a widespread call for the government to re-introduce a version of Help to Buy to kickstart the new build market.
Adrian MacDiarmid, head of mortgages at Barratt Redrow, commented: “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.”
Edward McCoy, group sales director at Persimmon, commented: “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.”
Matthew Northover, QSix CEO, commented: “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 new Government’s objectives for new homes.”
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.”
Craig Calder, secured lending director at TSB, commented: “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.”
