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Ulster Bank and leading NI property developers open doors for first time buyers

21st Aug 2008

  • Ulster Bank joins forces with leading property developers from across Northern Ireland to help first time buyers get on the property ladder
  • First time buyers can gain access to the housing market without having to find initial deposit*
  • First time buyers will be safeguarded against house price volatility by up to 15%

A new initiative will allow first time homebuyers access to the local housing market without the need to fund a deposit, and including added protection against house price volatility. The scheme which is being rolled out in conjunction with a number of leading residential property developers from across Northern Ireland will be available to first time buyers from early September.

A key feature of the new mortgage product includes a five per cent deposit on the property contributed by the developer, repayable by the buyer only in the event of the property price rising by 5% or more after 5 years. The buyer will also be safeguarded up to an additional 10% against any fall in property value over that 5 year period.

Ulster Bank Head of Mortgages, Derek Wilson, says that the initiative is a major innovation, designed to support first time buyers in current housing market conditions.

First time buyer levels remain low in Northern Ireland, despite asking prices for properties having been reduced significantly in many areas during recent months. This product has been specially designed to provide first time buyers with additional protection against house price volatility and to allow them to purchase without having to fund a deposit themselves - two of the main deterrents for first time buyers Mr Wilson says.

A steady supply of first time buyers entering the housing market is vitally important, therefore by supporting first time buyers, this product offers resulting benefits to the market as a whole, Mr Wilson adds.

Notes

  • Properties involved in the scheme are independently valued to ensure a realistic valuation at the outset as well as at the end of the five-year mortgage agreement.
  • The purchaser is protected against the risk of house price volatility of up to a 15% fall in house value for the duration of the five-year agreement.
  • If at the end of 5 years: the property value remains the same or increases by less than 5%, the purchaser does not repay the 5% to the developer. Or, if the property value falls, the purchaser does not repay the 5% to the developer and the Bank reduces the mortgage by a maximum of 10% (of original purchase price) to maintain LTV at 95%.
  • * If the property value increase by 5% or more the deposit will be recouped by the developer - either via a top-up of the purchasers mortgage from Ulster Bank or via the purchasers own means.
  • If the purchaser sells the property before the end of the five year agreement, the purchaser pays the developer the full value of the initial five per cent deposit.
  • No Higher Lending Charge (normally charged for any mortgage over 90% LTV)
  • Free Valuation
  • Choice of competitive 5 year Fixed or Discounted rate deals
  • Terms & conditions apply