The product launch is a first in what the lender hopes will be a series of partnerships with developers and is the highest LTV Barclays has offered for a while, it said.
The scheme, designed by insurance broking group Jardine Lloyd Thompson (JLT)is available to brokers with Bovis ties and offers free unemployment protection for three years from exchange.
The product, being marketed as ‘The Perfect 10’, is a two-year fixed rate loan reverting
to a lifetime tracker at base rate plus 2.49%, or 2.99% at current rate. The arrangement fee
is £99.
The Barclays spokesperson said: “JLT came up with the idea and came and talked to us with Bovis following us in. Bovis has set up its own insurance company to cover our losses in the event of repossessions. This effectively brings the 90% LTV risk down to a much lower level.”
Barclays said its commercial arm flagged the new-build market as in need of funding. Andy Gray, head of mortgages for Barclays said: “The deal struck is about helping to get the housing market back on the right track but in a way that is sustainable in the long term.”
Steven Rance, partner, JLT Lending Solutions, added: “In Q4 2006, Council of Mortgage Lender figures show there were almost 8000 new house sales at 90% LTV. By the last quarter of 2009 this figure had dropped to only 117 sales – a staggering fall of 98.5%.”
He added: “This is an extremely timely and exciting development for lenders, builders and the UK housing sector.”
