First time buyers looking for a new-build apartment in Croydon are probably feeling the same way as many others aspiring to own their first home. Because few new buyers have the large deposits they need in order to have access to the most competitive mortgage interest rates on the market, they are being penalised with higher repayments on loans requiring a lower deposit - if they can afford it at all. So how would you feel if a housebuilder offered you the chance to buy a brand new apartment requiring only a 5% deposit, but with the more affordable mortgage interest rate achievable on a loan of just 80% of the property value?
That's what Barratt Homes' Head Start scheme is doing at its New South Quarter development in Croydon. Located just a mile from the town centre, the completed scheme will include a store, medical centre, nursery school and cafe. With a selection of one- and two-bedroom apartments available from £164,995, it means that buyers can consider purchasing one of the contemporary-styled properties with a deposit of as little as £8,249. Barratt then provides a loan of up to 15% of the property price interest-free for ten years, with the remaining 80% being financed by a conventional mortgage, but crucially, one that has a much more affordable borrowing rate than higher loan-to-value mortgages.
Tim Nabbs, Barratt Kent's Sales Director, believes this shared-equity scheme is just what many first time buyers have been looking for: "It seems very unfair that those struggling to get onto the property ladder face the highest costs in mortgage lending. That's why our Head Start scheme works so well as not only does it provide access to more affordable mortgage rates but it means that only a five per cent deposit is required upfront. This will mean that many first-time buyers can buy a home now rather than spending years in rented accommodation or living with parents."
Barratt Homes currently has properties for sale in some 240 developments in England, Wales and Scotland, where every property features a five-year warranty in addition to the standard 10-year NHBC guarantee.