After temporarily removing Help to Buy options for home movers over the summer months, contractor friendly lender Nationwide Building Society has re-launched products for applicants looking to utilise the Government backed scheme. At the start of June the lender followed the move made by the equally contractor friendly Lloyds Banking Group to restrict the H2B scheme to first time buyers only, in a bid to reduce the level of exposure the society faced based on loans attained in this format.
The Nationwide divisional director of mortgages, Richard Napier, commented: “Nationwide has been a long-term supporter of the Help to Buy equity loan scheme. By opening up access once more to home movers after a short break, we will remain one of the top lenders through the scheme and will enable even more customers to move onto or up the housing ladder.”
In addition, the lender said that it had ”taken time to assess developments in the equity loan market” and after consideration had decided that it was a safe decision to return to lending in this area. Nationwide confirmed that the original decision to pull back on lending via the H2B scheme came about as a response to the Lloyds Group pulling out of this market. As one of the largest lenders and supporters of the shared equity and equity backed schemes in the sector, Nationwide confirmed that it was clear the move would open up the possibility of building societies soaking up the market share that the Lloyds Group would have accrued.
In July, Government statistics showed that at least 40,000 borrowers had utilised the scheme, with more than 27,000 properties purchased via the options offered. While many have been purchased utilising the scheme one variation where the Government supply up to 20 per cent as additional deposit monies, the scheme has seen an even greater take up for the 2nd variation, where just 5 per cent as a deposit is required to buy a home.
Nationwide have also taken the opportunity to lower the arrangement fees charged for a new loan, with the option for higher fee-free rates, improved options with a £999 fee and a reduction to £499 for first time buyers now on offer. The move will push the societies Help to Buy options back into direct competition with other lenders still offering these options.
Jennifer Ward of Contractor Mortgages Made Easy noted: “This is great news for contractors, as Nationwide have been a long standing supporter for the equity share schemes, with competitive rates and fees always a key to their proposition. It will be interesting to see whether the Lloyds Group, especially Halifax Bank, will also re-introduce a range of Help to Buy options to compete with the Nationwide move.”
Ward also remarked on the influx of rate reductions many lenders have introduced over the past month: “In recent weeks lenders have also been lowering interest rates across the board, seemingly in an attempt to meet lending targets before the end of the year. This is great news for contractors, as there are now a range of highly competitive long term fixed options of offer, with Virgin Monies range of 5 year fixed rates below the 3 per cent margin of particular note.
“With the potential for interest rate increases on the horizon, it could now be the last opportunity for borrowers to secure a low rate long term rate, before the Bank of England take measures to increase the base rate.”
Article By: Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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