Halifax to lower deposits on new builds to five percent 

According to the bank, saving for a deposit is “often the biggest hurdle first-time buyers face” in getting onto the property ladder. It said this move will “make that significantly easier for many.”

It added that, based on the UK’s average house price of £289,099 (according to Halifax’s June House Price Index) the minimum deposit needed for a home could become as low as £4,000.

The lender said bringing the maximum loan to value in line with existing properties had the advantage of making greener homes more attainable for first time buyers. 

New builds have had to have energy performance certificate ratings of B or above since 2012. The government has set a target to cut carbon emissions by 78% by 2035 compared to 1990 levels, and hit net zero by 2050.

“This improved energy efficiency means owners of new build houses save over £500 per year on household bills per year,” Halifax said.

The lender also said shared ownership is an increasingly attractive choice for many of those struggling to get on the housing ladder, particularly where homes are above the national average.

Buying part of the property initially and increasing that share at a point in the future, shared ownership “is another solution for first time buyers who find the first step to home ownership difficult”.

Halifax will now accept a five per cent deposit on both new build flats and houses in shared ownership schemes run by housing associations.

Halifax mortgage director Andrew Asaam said: “We recognise that getting a deposit together is still the biggest hurdle faced by most FTBs, and these changes could reduce the minimum deposit required on an average house to as little as £4000.”

“This also underlines our confidence in the new build market and our support for the UK construction industry. We have worked closely with the industry and listened to their needs to develop these changes.”