But one former first-time buyer has used his frustration at being unable to secure a mortgage as a catalyst for change and has just created a homeownership scheme for those struggling to cross the financial hurdles.
Eliot Darcy hopes ‘Own New’ will help fill the gap left by the closure of Help to Buy and enable those with a low deposit to buy their first home or take the next step up the property ladder.
The scheme, which allows homebuyers to benefit from a 95% loan-to-value (LTV) mortgage – meaning they need just a 5% deposit – has been launched in conjunction with Darlington Building Society and will be available to people looking to buy in the lender’s operating area.
However, a national rollout is due to follow as more lenders are announced.
Darcy, who is now founder of Own New, set out to buy his first home when he was in his 20s.
Despite having a stable income, he struggled to secure a mortgage, while friends with wealthy parents enjoyed a much more straightforward route to buying.
So, he came up with Own New as a way to create a fairer system for mortgage lending.
“I firmly believe that home ownership should be based on prospects, not parents,” he said. “I made a promise to myself that I would try to fix this issue in the market and the launch of our first mortgage product is a momentous step towards achieving that aim.
“Lenders can now offer better mortgages to people who don’t have a ‘bank of mum and dad’, as well as people who want to move home and need support with the next step.”
How does Own New work?
Own New works with lenders behind the scenes to reduce the risks linked with high loan-to-value mortgages. This means the lender can offer mortgages with more attractive rates to a wider range of buyers.
Darlington Building Society is the first to launch a product with Own New and other lenders will follow in the coming weeks.
More than 60 homebuilders across the country have signed up to offer Own New as it expands nationwide. Those already live across Darlington Building Society’s operating area include Barratt Homes, Persimmon, Bellway, Homes by Esh, Story Homes, Port Homes, Amethyst, Dere Street and David Wilson Homes.
You can find out more about Own New here.
Own New is funded by housebuilders, who pay a small fee on completion of the sale. There is no cost to the homebuyer. They simply apply for a standard mortgage in the usual way through Darlington Building Society and own 100% of their home.
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