In our line of work, we think anything that helps people get the home of their dreams is worth shouting about.
When that home is the first home they have owned, this marks a significant landmark in a person’s life.
There have been a few initiatives to support people looking to secure their first home over the years. One such new scheme is Deposit Unlock, which this week is having its national launch across England, Wales and Scotland.
Remind me what Deposit Unlock is?
Led by the House Building Federation, Deposit Unlock is a collaborative initiative that allows buyers to secure a mortgage on a newbuild home with just a 5% deposit from a list of home builders.
Though particularly appealing to first-time buyers with limited deposits, the scheme is not exclusively for this type of buyer. Second steppers will also be able to take advantage of Deposit Unlock’s offering.
This is where the initiative differs from the government’s Help-to-Buy scheme, which only offers low-deposit mortgages for first-time buyers. What’s more, Help-to-Buy is set to end in March 2023, while no such end date has been applied to Deposit Unlock.
Who is involved in Deposit Unlock?
The brainchild behind Deposit Unlock, the House Building Federation (HBF), has said there are currently 17 major homebuilders involved in the scheme. This reportedly covers 60% of the house building industry in the UK, so it is fair to assume some pretty big names are involved.
The HBF has also worked with Homes for Scotland and the scheme manager, Gallagher Re, to launch Deposit Unlock.
Deposit Unlock started out earlier this year with a pilot project in Newcastle, with Newcastle Building Society being the first lender to offer Deposit Unlock nationally. The HBF is reporting that the first completions are now being reached for this pilot project.
In terms of additional lenders involved in the initiative, as reported last month, Nationwide is one of the first big lenders to sign up. The HBF reports that it expects more lenders to follow suit in 2022.
Who will Deposit Unlock appeal to?
Anybody looking to get a newbuild home of their own, and who does not have access to the Bank of Mum and Dad, stands to benefit from Deposit Unlock.
Additionally, with the HBF saying Deposit Unlock will help ‘soften the blow’ of Help-to-Buy’s departure from the market, the scheme represents an opportunity for potential buyers in need of support to make that step onto the property ladder.
What does the national launch signify?
Following the successful regional pilot in Newcastle, the Deposit Unlock initiative will start being made available for new build properties across England, Scotland and Wales over the coming months.
The scheme will therefore start to crop up more and more during any research into buying a new home for first or second time buyers.
The national launch will see this more frequently being the case, and could play a part in helping you get that perfect home sooner rather than later.