Halifax has changed its lending criteria to make mortgages for new build houses more accessible to more borrowers.

The lender is cutting the minimum deposit it requires for new build mortgages to just 5% (from 10%). This means borrowers can now take a mortgage of up to 95% of the property’s value on a new build house.

It’s also extended its maximum loan-to-value ratio on shared ownership mortgages to 95% and is opening up its lending to those buying houses built by smaller developers.

The lender has removed its previous requirement that those borrowing over 85% of the property’s value had to be purchasing a house constructed by an ‘approved developer’ on its panel. Now it will open up lending on 5% deposit mortgages to properties built by over 5,000 smaller developers.

Help for first-time buyers

Halifax said that ‘putting a sufficient deposit together is one of the biggest hurdles for first-time buyers’, so its new lending criteria should make it ‘significantly easier’ for those who want to buy a new house.

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New build houses are also more energy efficient than existing houses, so by improving access to mortgages on them, the lender said it’s ‘making green homes more attractive and attainable for first-time buyers’.

Andrew Mason, head of strategic partnerships – housing at Halifax, said: “These changes could reduce the minimum deposit required on an average house to as little as £4,000.

“This also underlines our confidence in the new build market and our support for the UK construction industry. We have worked closely with the industry and listened to their needs to develop these changes.

“Just as importantly, supporting new build homes supports the drive to net zero by making warmer, greener homes more accessible and attainable for potentially thousands of new buyers.”