Barratt appeals for easier mortgages to buy new homes

Housebuilder Barratt Developments today called on lenders to make mortgages more readily available to buyers of newly built homes and thus drive a recovery in the sector.

Banks and building societies traditionally demand higher deposits for new-build homes than second-hand homes.

Santander, the UK's second largest mortgage lender, today raised the amount it will lend to first-time buyers who want new houses from 80 per cent of the property's value to 90 per cent — cutting the size of the deposit in half.

Barratt chief executive Mark Clare said: "This is a move in the right direction. Our hope is that other lenders will follow suit. Further recovery in the new housing market will depend on the availability of higher loan-to-value mortgages."

Barratt posted a first-half loss of £178.4 million for the six months to 31 December having reported a deficit of £594.5 million a year ago.

Demand continued to recover and prices were on the rise — particularly in London where Clare expects completed sales to rise sharply in the second half.

Clare said: "London is the strongest market by far. Demand has come back much faster and the shortage of supply is much more acute in the capital."