Aldermore has become the first ‘challenger bank’ to commit to the NewBuy scheme, aimed at helping new home buyers overcome the deposit gap.
A campaign to encourage take up of NewBuy products is expected to launch this month, amid fears that banks were not promoting the scheme to the fullest extent.
The bank will work with developers Fairview New Homes, who operate in the South and East of England, to provide products that allow homebuyers to purchase properties with 5 per cent deposits.
First-time buyers, and those who already own homes but only have funds for a 5-10 per cent deposit, will be eligible for the scheme. Those who qualify will be offered 90-95 per cent loan-to-value mortgages underwritten by the government.
Aldermore will become the first bank outside the ‘big five’ to participate in the scheme, taking on Barclays, Nationwide, Natwest, Santander and Halifax.
Fairview already partners with Nationwide and Halifax on the scheme.
Fairview sales and marketing director Jim Holliday said the firm was “delighted” with the partnership, and “to be the first of the UK house builders to work with the new bank”.
“Standing now as one of the best capitalised banks in the UK, Aldermore is an ideal addition to our roster of existing financial partners and will offer our homebuyers a new option in their choice of mortgage provider.”