Santander to lower deposit requirements for new build properties

by Aaron Strutt

Feb 26 2024

Santander has lifted the maximum loan-to-value ratio on newly built houses and flats to 95%, which means that these borrowers will need to find a 5% deposit to buy a home. 

The maximum loan-to-value for standard residential new build houses and flats will be increased to 95%. Santander is also increasing the maximum loan-to-value for buy-to-let newly built flats to 75%.

• Santander's standard residential new build house loan-to-value has increased from 85% to 95%.
• Santander's standard residential new build flat LTV has increased from 80% to 95%.
• Santander's shared Ownership new build house LTV has increased from 85% to 90%.
• The Buy to Let new build flat LTV has increased from 70% to 75%.

The initiative from Santander comes as Virgin Money and Halifax announced they will offer more mortgage rates for new-build customers. Also, Chancellor Jeremy Hunt is understood to be drawing up plans for a 99% mortgage scheme for first-time buyers who buy new build homes ahead of next month’s Budget.  

Incentives for new build properties

Santander's existing sales incentives will continue to apply for loans up to 90% loan-to-value. For loans above 90% loan-to-value, cash incentives from the builder/developer are permitted totalling ≤ 5% of the purchase price for:

• stamp duty,
• legal fees, and
• estate agent's fees.

Non-cash incentives for carpets and curtains, white goods/fitted furniture and non-retail vouchers provided by the builder/developer for property-related upgrades should be accepted.

Incentivising the new build sector

From the launch of Help to Buy by George Osborne in 2013, more than 387,000 newly built properties were purchased with the assistance of the scheme. In total, that’s a reported £109 billion-worth of homes where buyers were provided with a helping hand through an equity loan from the Government.

Schemes are being launched to incentivise the new build sector; for example, there has been a collaboration between Octopus Energy and Bellway Homes with the ‘Zero Bills’ partnership. Bellway is the first national housebuilder to join the low-carbon homes project Pilot to launch in Stafford, with 250 homes in Bedfordshire to follow soon. Partnership boosts Octopus’ goal of building 50,000 energy bill-free homes by 2025 Zero Bills™ homes to save households around £1,800 a year to on energy bills.