The club and network analysed 100 lenders and found that only 10 per cent offered a 95 per cent LTV mortgage on new builds.
“We urgently need to look at ways for customers to afford a new home, with Help to Buy scheduled to shift to first-time buyers-only in 2021 and to be removed completely in 2023,” said Stacey Wood, national new build relationship manager for PMS and Sesame (pictured).
Help to Buy’s 20 per cent interest-free equity loan had supported more than 210,000 property purchases since the scheme began in 2013, Wood said.
Of these, 81 per cent were first-time buyer purchases.
First-time buyers paid on average £294,920 for a new build home through the Help to Buy scheme in the first quarter of 2019.
“With only a small number of lenders operating above 85 per cent LTV on new build, customers will have to raise deposits of £44,000. The solution has to be more lenders increasing the LTVs on new build properties. The industry needs to start planning sooner rather than later,” Wood said.
“We have recently seen some improvements from lenders on higher LTVs, which is a step in the right direction, but much of this has come from specialist lenders and small regional building societies. There is much to be done in mobilising the broader market to action,” she added.
Get behind MMCs
PMS and Sesame also called on lenders to embrace modern methods of construction (MMC) to support house building.
Jane Benjamin, director of mortgages at PMS and Sesame, said: “We’re in constant dialogue with lenders as they shape their future strategies and propositions. New build is an important part of this agenda, particularly because 85 per cent of the market is advised.
“More lenders embracing MMC is part of the long-term solution and we raise it in our discussions. MMC could enable new properties to be constructed quickly and efficiently.
“Progress is being made with some lenders now considering MMC on approved contractors, warranties and satisfactory valuations,” Benjamin said.
New build, Help to Buy and MMC will feature as agenda topics at the upcoming PMS and Sesame Mortgage Extra Live adviser events happening nationwide in September.