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Santander enters NewBuy through Abbey For Intermediaries

Santander has entered the NewBuy market with a range of three-year, five-year and seven-year fixed-rate deals available only through its Abbey For Intermediaries brand.

This range is offered only to intermediaries with established ties to Barratt Homes including David Wilson Homes and Ward Homes, Berkeley including St George and St James, Bovis Homes, or Persimmon including Charles Church and Westbury.

Available as part of the Government’s NewBuy scheme launched in March, these deals are designed to help borrowers to get on the property ladder. All products come with the Homebuyer solution as a standard incentive, which includes free valuation plus £250 cashback on completion. As well as first-time buyers, the deals are also aimed at existing homeowners who want to move to a new-build property.

One of the deals in the range is a three-year fixed rate mortgage at 5.49 per cent, available for loans up to 95 per cent of valuation. It has a low upfront fee of £99.

Santander says sales of new homes have suffered since the financial crisis in 2008 and borrowers with smaller deposits have found it more difficult to buy. NewBuy was developed as a way to make buying a home more affordable, but NewBuy deals have been criticised for having high rates. Research from property analyst Hometrack recently found that the average weekly repayment costs for NewBuy are higher than shared equity products and renting.

Abbey for Intermediaries’ rates are competitive relative to other NewBuy lenders that distribute through intermediaries. Nationwide has two three-year fixed NewBuy deals, both with higher rates that Abbey For Intermediaries.

One of the Nationwide deals is fixed at 5.79 per cent with total fees of £499 for first-time buyers and £999 for other buyers. The other deal is fixed at 6.09 per cent but has no fee. Both Nationwide Nationwide deals have a 4 per cent early redemption charge – 1 per cent higher than Abbey For Intermediary’s ERC.

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