Thoughts on the new Barclays/TSB 5% deposit scheme?

This is yet another encouraging tool to help borrowers buy new-build properties at a time when that particular market has been faltering. There are several schemes that assist new buyers with these smaller deposits, so it's not unique, and the limited distribution through specific builders and broker firms will be frustrating for many, but any new opportunities are welcomed, and hope they will help improve this stagnant property market.

Rising from the ashes of the government’s Help to Buy scheme, this new initiative brings together housebuilding giants Barratt Redrow and Persimmon with lenders Barclays and TSB. The aim is to stimulate the new-build property market without relying on government support. Innovative ideas like this deserve recognition, and the scheme could well provide a helping hand to borrowers otherwise struggling to save a sufficient deposit to get on the property ladder.

However, the number of homes built are potentially limited, meaning competition could be fierce and prices may be driven up. Additionally, these products will only be available through certain channels, so they won’t necessarily be accessible to everyone.

It’s a smart move by Barratt Redrow and Persimmon to get newbuilds moving again. The market has needed a boost since Help to Buy ended, and this scheme will tempt sidelined buyers. While innovative, the same pitfalls remain. Non-amortising debt at 4% may look like a quick win but it’s effectively a part-and-part mortgage that delays repayment. The Help to Buy hangover still lingers, with many homeowners trapped by equity loan charges limiting remortgage options. Without a clear exit strategy, we risk repeating the same cycle, short-term stimulus, long-term constraint. Good for developers and private equity, but a calculated risk for buyers. Still, credit where due: it’s a bold, market-led solution filling a gap government left open and could revive transactions, confidence, and sales if managed carefully.

We get a lot of enquiries from first-time buyers who earn good money but can’t save a big deposit because of high rents, so schemes like this can make a real difference. Giving people more routes onto the ladder is always welcome.

But it’s vital buyers understand the detail, particularly how the shared equity works if they sell or remortgage. It can limit lender choice later or affect how much equity they actually own, so good advice up front is key.

It’s heartening to see that the private sector is trying to find new ways to help buyers enter the housing market. Especially when the government seems void of ideas. For first time buyers and young families in particular this will be exciting news. It remains to be seen how this new offer plays out - the fixed rate of 4% on the Equity Loan element for the duration of the loan is attractive at the moment but if rates drop this could mean that borrowers are paying over the odds in the future.