In a significant move for the UK housing market, NatWest has announced a major expansion of its mortgage products, specifically designed to help a greater number of people get onto the property ladder.
New Shared Ownership Mortgage Scheme
The cornerstone of this announcement is the launch of a new shared ownership mortgage product. This initiative allows potential homeowners to purchase a share of a property, starting from a minimum of 25%, while paying rent on the remaining portion. This model is aimed at providing much-needed flexibility for those struggling to afford a full property purchase.
These mortgages will be available for both new purchases and remortgaging, including situations known as 'staircasing' where customers increase their share over time. Initially, this product will be offered exclusively via mortgage brokers.
NatWest's shared ownership borrowing is not tied to a single product and can be used with various mortgage types, such as those offering up to 95% loan-to-value on new builds. Furthermore, after six successful mortgage payments, customers will be eligible to apply for additional borrowing, initially limited for staircasing purposes.
Enhanced Criteria for New Builds and Interest-Only Mortgages
Alongside the shared ownership launch, NatWest has also made key enhancements to its lending criteria. For customers purchasing new build properties, the bank is now offering 90% loan-to-value on flats and 95% on houses, reducing the deposit required.
Significant changes have also been made to interest-only mortgages. The bank has increased its loan-to-value limits, raising them from 50% to 75%, and from 75% to 80% where other investments form the repayment strategy. To be eligible for this type of borrowing, applicants must meet a minimum income threshold of £75,000 for individuals or £100,000 for couples.
A Strategic Push for Home Ownership
Lloyd Cochrane, Head of Mortgages at NatWest Group, stated the bank's clear objective: "We want as many of our customers as possible to be able to buy their own home." He explained that the introduction of shared ownership mortgages provides more choice for customers considering their path onto the housing ladder.
Cochrane added, "We have also made improvements to our borrowing criteria meaning customers can buy a new build flat or house with a lower deposit. Together these changes mean we can help to bring the dream of home ownership within reach of more customers sooner." This dual approach of new products and relaxed criteria represents a substantial shift in NatWest's strategy to address affordability challenges in the UK property market.
