Nationwide Building Society have announced they are to lower the minimum deposit required for first time buyers to 10% from 20 July.
This comes as Chancellor Rishi Sunak announced last week that people will not pay Stamp Duty on the first £500,000 of their purchase.
Sunak told MPs last week in his summer statement that the Stamp Duty holiday only applies to England and Northern Ireland and will last until 31 March 2021.
Nationwide said their new 90% LTV mortgages for first time buyers will provide further support for the housing market as activity has increased.
Britain’s largest building society said there they will set no limit on the number of home loans available, but there will be some conditions alongside the new low deposit scheme.
The purchase of the new home must be at least two years old, with the maximum mortgage term is 25-years and all applicants are subject to an enhanced credit scoring criteria.
Henry Jordan, director of mortgages at Nationwide Building Society, said: “First-time buyers are vital to breathing life into the housing market and economy.
“We understand one of the biggest barriers to home ownership is raising a deposit.”
He added: “While we will continue to monitor the market carefully, we feel it is the right time to enhance our lending, initially to those looking for their first home.
“We welcome the Government’s announcement on stamp duty and hope our combined changes create a positive impact on a market that, despite being in relatively good health, is still recovering.”
Eleanor Williams, a finance expert at Moneyfacts said, “For the stamp duty holiday to succeed in encouraging more prospective borrowers to take that next step on the property ladder, the demand for products, especially in the high LTV tiers where most of the fluctuations in availability are focused, needs to be met.”
Miles Shipside, commercial director at Rightmove said, “There’s been record demand for property on Rightmove since the market reopened which has been boosted even further by the stamp duty announcement, all of which should help activity levels over the coming months.”
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