Exploding The New Homes Mortgage Myth (Chiltern)
19 Oct 2012

There is a common misconception amongst would be home buyers at the moment that it is impossible to get an affordable mortgage: It is a myth.

It is a misconception that most likely has its origins in the worst of the recession – when times were very uncertain and the lenders were tightening their belts.

But that was at the height of the credit crunch and what many people don’t realise is that a lot has changed since then.

And if you do assume that it’s hard to get a first time buyer mortgage, you’re not alone. A survey, commissioned by Halifax, has discovered that it is currently a very common view:

Their report, published this summer, found that 92% of the survey respondents believed it was hard for first time buyers to obtain a mortgage at the moment.

The perception, amongst 84% of those surveyed, is that banks do not want to engage with first time buyers – so there is little point in applying.

Yet, interestingly and conversely, those who have bought a home since the credit crunch in 2007 say it was ‘very easy’ for first time buyers to obtain a mortgage: Many even stated that was easier than they had expected.

The overall conclusion of the Halifax report is that, at the moment, there are clear gaps between the perception of the mortgage market and the reality.

It is true that just a couple of years ago many doors were closed to first time buyers, but since then the lenders have been, albeit quietly, loosening their credit constrictions. And more recently – in March this year - the Government pitched in and launched its NewBuy Scheme.

Adam Champion is New Build Sales Director for The New Homes Group. He says the Halifax survey provided a very revealing overview of what was happening:

“The Halifax report was interesting – it clearly showed that the perception of mortgages was very different to what is actually on offer. Look at the Government’s NewBuy scheme, for example: Nearly 70% of those who apply for a NewBuy mortgage get one – and it’s not just for first time buyers, it’s for anyone buying a new build home.”

Adam says that when he explains to potential buyers what mortgages are on offer and works out the figures for them, the overwhelming reaction is one of disbelief:

“People have come to the conclusion, quite wrongly, that all mortgages require a 10% or 15% deposit. It’s not true. I tell them that it is 5% - and at first they don’t believe me!”

This summer’s Halifax survey reflected the same thing: It found that the most off putting thing – according to 67% of those who were asked – was the perceived large deposit they thought they’d have to pay.

But, as Adam explains, what they and many other people don’t realise is that schemes are different for new build homes:

“You can get deals on new homes that aren’t available for second hand ones and that’s because they’re funded, in one way or another, by the building companies. Linden Homes, for example, has more schemes available than anyone else and offers a 95% mortgage; they work with half a dozen or so different lenders to set these mortgages up.”

Linden Homes’ Mosaic development in St Albans is a case in point: Mosaic is a striking collection of contemporary, light and spacious apartments set in the heart of this historic city. St Pancras is just 20 minutes away via rail, whilst London Bridge Station is 40 minutes away. It’s a great location and a wonderful place to live. Prices for a one bedroom home at Mosaic’s Barcino Apartments start at £185,000 for a one bedroom apartment: But many people may assume that they can’t afford to live somewhere as well located as this – when the opposite may be true.

Simon Pendlebury, Linden Homes Chiltern, sales and marketing director says he thinks people are discouraged because they wrongly believe that they’ll be turned down for a mortgage or bombarded by incomprehensible and irrelevant financial facts and figures if they do try:

“It’s not until people are given the figures clearly and concisely that they realise how affordable some of the current mortgages are. Linden Homes has a good variety of different schemes on offer and to make the process of finding a mortgage as easy as possible, we work very closely with the specialist financial advisers “The New Homes Mortgage Helpline”.

“When you contact them, they will be able to give you the facts and figures – but they’ll simplify them so you get a quote that is relevant to you. Their advisors can tell you how much you can spend on your new home, how much your mortgage will cost you every month and how much you’ll need to start with.”

Adam Champion believes that one of the options available, the Government led NewBuy scheme, is increasingly gathering momentum. But he says a common misconception is that NewBuy is only for first time buyers:

“Many people don’t realise that NewBuy is for everyone – as long as the value of the property being purchased is no more than £500,000. In fact 40% of NewBuy mortgages that have been offered since March have been for next time buyers who want to move up the property ladder.”

So what is Adam’s advice?

“If you’ve tried getting a mortgage before and failed, then try again. A lot has changed in the last two years or so. It’s worth talking to us and to Linden Homes to find out what is on offer now. Things really have changed so much.”

For more information about mortgages and other schemes, call the New Homes Mortgage Helpline on 01206 715415.

To find out more about Mosaic in St Albans visit Linden Homes’ sales and marketing suite on site, or call  01727 853760. The suit is open every day.


For further information, contact Claire McCowan or Tracy Mannion at Remarkable Public Relations on 01962 893 893 or Claire.mccowan@remarkablegroup.co.uk

References to “we”, “us” or “our” are to the part of the Vistry Group (including Linden Homes, Bovis Homes, Countryside Homes, Drew Smith, Vistry Ventures or one of Vistry’s joint venture companies) from which you are intending to purchase a new home. References to "you” and “your” are to the prospective buyer or buyers of a new home from us.

All images are used for illustrative purposes only and are representative only. They may not be the same as the actual home you purchase and the specification may differ. Images may be of a slightly different model of home and may include optional upgrades and extras which involve additional cost. Individual features such as windows, brick, carpets, paint and other material colours may vary and also the specification of fittings may vary. Any furnishings and furniture are not included in any sale. Please check with our sales consultants for details of the exact specifications available at the development(s) for each type of home and the associated prices.