Introduction to New Build Boost

In a significant move to address the UK's housing affordability crisis, Gen H has launched New Build Boost, a pioneering mortgage scheme designed to help first-time buyers and those without access to family financial support. This innovative program aims to fill the gap left by the end of the Help to Buy initiative, which previously assisted thousands of households in achieving new build homeownership. With New Build Boost, Gen H is offering a more flexible and borrower-friendly alternative that could revolutionize the way people purchase new homes.

How New Build Boost Works

The New Build Boost scheme is structured around three key components:

• Minimum Deposit Requirement: Buyers need to provide a minimum of 5% of the purchase price as a deposit.
• 80% LTV Mortgage: Gen H offers an 80% loan-to-value (LTV) mortgage, which means borrowers can secure a significant portion of the home's value without needing a large deposit.
• 15% Interest-Free Boost: The scheme includes a 15% interest-free boost, supported by the house builder, to bridge the gap between the deposit and the mortgage amount. This boost is tied to the property's value, similar to an equity loan, but with more favorable terms for borrowers.

Key Features and Benefits

New Build Boost offers several advantages over traditional mortgage schemes and the now-defunct Help to Buy program:

• Interest-Free Boost: Unlike Help to Buy, which charged interest after five years, New Build Boost remains interest-free for its entire term. This eliminates the potential for payment shocks that many Help to Buy customers faced.
• Flexible Repayment Terms: Borrowers have the option to repay the boost in whole or in part at face value during the first five years. After this period, the boost's value adjusts based on changes in the property's value.
• Capped Repayment: To protect homeowners from significant increases in property value, the repayment amount is capped at twice the original boost amount.
• Simplified Process: The entire process is streamlined under one roof, allowing for a single application and online account management. This includes digital property valuations for boost repayments.

Partnership with Persimmon Homes

Initially, New Build Boost will be available on over 120 participating sites across England, exclusively with Persimmon Homes. However, Gen H plans to expand the scheme to include other house builders and lenders, making it more accessible to a wider audience.

Impact on Housing Affordability

The launch of New Build Boost comes at a critical time for the UK housing market. Since the end of Help to Buy, approximately 30,000 fewer households have been able to access new build homeownership annually. By providing an alternative that is both affordable and flexible, Gen H aims to increase homeownership opportunities, especially for young families and individuals without family financial support.

Future Prospects

As the UK continues to grapple with housing affordability, initiatives like New Build Boost are crucial. By encouraging more home builders to participate and inviting other lenders to join the scheme, Gen H is positioning itself as a leader in innovative mortgage solutions. This approach not only supports buyers but also incentivizes builders to increase the supply of new homes, addressing a key aspect of the housing crisis.

Conclusion

New Build Boost represents a significant step forward in making homeownership more accessible. By offering a borrower-friendly alternative to Help to Buy, Gen H is helping to bridge the affordability gap and provide hope for those seeking to own their first home. As the scheme expands, it could play a pivotal role in shaping the future of the UK housing market.