NEW ‘Deposit Unlock’ scheme – what you need to know

The new Deposit Unlock scheme has launched, aiming to help more would-be homebuyers afford a New Build property.

What is the Deposit Unlock scheme? Deposit Unlock is a new scheme which allows first time buyers and home movers to buy a New Build property with a 5% deposit, using a maximum mortgage of £750,000.  Its aim is to make buying a New Build property more accessible to those with smaller deposits.

Typically mortgage lenders require a deposit of 10%-15% on New Build properties, and changes made to the Help to Buy scheme in early 2021 meant that higher-value properties and non-first time buyers were no longer eligible for the scheme, so the mortgage and property industry set about finding an alternative solution.

Who is eligible for the scheme?  First time buyers and home movers who won’t own any other mortgaged properties by the time they move into the New Home.

Which properties will be eligible?  New Build properties only, built by participating builders.  The Home Builders Federation (HBF) has now published a list of participating builders.

Are there any other restrictions to the scheme?  Only a couple of lenders are currently supporting the scheme, but hopefully this will improve over time.  Your 5% deposit must be from your own funds or a family gift (it can’t be a loan), and if you’re self-employed or run a business which was affected by the Pandemic, you might not be eligible at the moment.

How do I get ready for the scheme?  Taking independent mortgage advice is a good starting point and we’d be happy to help you work out your buying power if you get in touch.  You should also check your credit score using one of the free credit checking websites such as MSE Credit Club.  Other than that, keep an eye out for local developments and set up a property search alert on Rightmove for New Build properties in your area.

We’re really excited about this new scheme and would love to help you get on the property ladder, so if you’re thinking of buying why not get in touch and see how we can help, or sign up to our monthly newsletter, to keep informed of developments.

Sam Murphy – 22nd November 2021