Housebuilders Barratt Redrow and Persimmon, together with real estate asset manager QSix and FCA-regulated mortgage lender Ahauz, have launched the Rezide Equity Loan — a second charge loan product designed to support buyers struggling with high deposit requirements. The product is backed by Barclays and TSB, who will provide the main mortgage lending.
The Rezide Equity Loan enables buyers to purchase a new-build home with a 5% deposit. A further 15% of the property’s market value is covered by the equity loan (up to £100,000), with the remaining 80% financed through a standard mortgage from one of the participating banks.
Initially available for purchases of Barratt Redrow and Persimmon homes, the scheme will be rolled out across England. It is intended to support both first-time buyers and existing homeowners who may face affordability challenges in moving to a new build property.
The initiative follows the end of government schemes such as Help to Buy and reflects a private-sector approach to addressing barriers to homeownership.
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.”
Adrian MacDiarmid, head of mortgages at Barratt Redrow, remarked: “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.”
About the Rezide Equity Loan:
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Homebuyers will put down a 5% equity deposit and take out a Rezide Equity Loan equating to 15% of the home’s market value, (subject to a maximum of £100,000), with the remaining 80% of the purchase price borrowed from Barclays and TSB.
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. The loan product is non-amortising and has a fixed interest rate of 4%, payable over the entire term of the loan.
Repayment of the equity loan becomes due upon sale of the property, or the maturity date of their first lien mortgage. The loan can be repaid at any time, without the borrower incurring any early repayment charges.
The minimum income required to qualify for acquiring a new-build home using the loan is typically lower than that required to secure a 95% LTV mortgage equivalent, increasing the proportion of people able to afford a new build home.
How it works
+ Barratt Redrow and Persimmon sales advisers will consult with prospective buyers as part of the property reservation process.
+ The sales adviser will inform the customer about the suite of products available to assist customers in purchasing the selected property.
+ If a customer is interested in the scheme, the sales adviser will refer them to a mortgage adviser for more detailed advice on the product and to help determine the product’s suitability for the customer.
+ Ahauz, an FCA-regulated mortgage lender, will originate the Rezide Equity Loans.
+ The mortgage adviser will conduct a thorough financial qualification process, with the customer providing documents for review.
+ Both lenders will perform underwriting checks to ensure compliance with policy rules and affordability.
+ If approved, mortgage offers are issued by both lenders, and the mortgage adviser will help the customer coordinate with solicitors for the next steps.
+ The customer will then proceed to the completion stage of purchasing the selected home. The solicitor will handle all pre-completion and post-completion formalities.
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.”
Edward McCoy, group sales director at Persimmon, added: “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.”
Read the orginal article: https://propertyindustryeye.com/property-giants-team-up-with-barclays-and-tsb-to-launch-5-deposit-scheme/
