New 95% LTV mortgages for new homes

A new high loan-to-value mortgage scheme, which was set up by the Home Builders Federation (HBF) and the Council of Mortgage Lenders (CML) with a view to helping more people to buy a new build home, will be managed by Jardine Lloyd Thompson Group plc (JLT), it was announced today.

The HBF appointed JLT, which is made up of Lloyd & Partners Limited, JLT Specialty Limited and JLT insurance Management (Guernsey) Ltd, to develop the new mortgage indemnity scheme, which will remove the risk of default losses from lenders, allowing lenders to offer up to 95% loan to value (LTV) mortgages on new homes. The scheme will see mortgages on new build homes underwritten by housebuilders and the Government.

Steven Rance, partner, JLT , said, "This risk management solution, created in response to the reduced availability of mortgage funding for homebuyers with small deposits, will reduce lender risk at higher LTV ratios and so allow lenders to offer 95% LTV mortgages for new home buyers at more competitive rates.

"The UK's major lenders and house builders are all supporting the scheme which is being backed by the Government and is expected to launch in March. This is an extremely timely and exciting development for lenders, builders and the UK housing sector."

Before the launch JLT will be developing the legal framework, scheme structure, bank accounts and systems with this initial scheme expected to run for three years.

Stewart Baseley, executive chairman of the Home Builders Federation, said, "The lack of high loan-to-value mortgages has been a major constraint on new home sales for the last four years. The indemnity scheme should provide a significant boost to new home sales over the next three years. Everyone involved in the scheme is now working very hard to ensure customers and home builders gain maximum benefit. HBF is therefore pleased to have appointed JLT whose experience and expertise will be crucial to the scheme's success."

Dominic Burke, group CEO of Jardine Lloyd Thompson Group plc, commented: "This is an excellent example of JLT working with its clients and stakeholders to provide innovative solutions, in this instance not only addressing the needs of the client but also their end customers."