JLT develops innovative insurance solution to increase
mortgage availability to buyers of Bovis Homes
9th June 2010, London: Jardine Lloyd Thompson ("JLT") today announces the launch of an innovative scheme to provide increased mortgage lending availability to first-time buyers and others with small deposits who wish to buy new homes built by Bovis Homes Ltd.
The solution, created in response to the reduced availability of mortgage funding for homebuyers with small deposits, will reduce lender risk at higher loan-to-value (LTV) ratios and so allow lenders to offer more competitive rates to homebuyers.
The first scheme has been set up with Barclays and will allow Barclays to offer to Bovis Homes customers a market-leading two-year fixed rate of 4.99% at 90% LTV - a very competitive rate in the current market.
As well as protecting the lender from risk, the package also includes unemployment insurance for the buyer. As long as they meet the scheme's eligibility criteria, buyers receive three years unemployment protection from the date of exchange. This means that if they lose their job at any time during the three years, they can expect their mortgage payments to be met for up to twelve months.
It is hoped that the scheme will be replicated for other housebuilders in the UK.
Steven Rance, Partner, JLT Lending Risk Solutions:
"Bovis Homes and Barclays were the first companies to recognise the potential benefits for homebuyers in the current market.
"In the last quarter of 2006, Council of Mortgage Lenders' figures show there were almost 8,000 new house sales in the UK at 90% loan-to-value. By the last quarter of 2009 this figure had dropped to only 117 sales - a staggering fall of 98.5%.
Until now, buyers looking to purchase a new home with a 10% deposit have had few options other than shared equity schemes. Now, thanks to this unique and innovative product from JLT, purchasers can access a highly competitive mortgage product, with a much smaller deposit, and purchase their new Bovis Home outright. This is an extremely timely and exciting development for lenders, builders and the UK housing sector."
David Ritchie, Chief Executive of Bovis Homes:
"In the current market, the ability of purchasers, especially first-time buyers, to access high loan-to-value mortgage finance has been severely curtailed. Working with Barclays and JLT, we have agreed The Perfect 10 mortgage package, which allows our customers to borrow up to 90% of the value of their new Bovis Home at a very attractive fixed interest rate.
"Many of our potential customers are struggling to save the higher deposits required by the mortgage market today and this innovative new product, which is currently only available to us, will mean that more customers will be able to buy a new Bovis Home now, at an affordable cost.
"We are also convinced that The Perfect 10 will allow us to reduce use of capital-hungry shared equity-style products, such as our own Jumpstart scheme, thus releasing more cash into the business for further investment. We believe this innovative new product will also assist the Group in delivering its sales targets for 2010 and beyond."
Dominic Burke Group CEO of Jardine Lloyd Thompson Group plc:
"This is an excellent example of JLT providing innovative solutions to its clients, in this instance not only addressing the needs of the client but also their end customers."
--ENDS--
Enquiries:
Jardine Lloyd Thompson
Paul Dransfield
020 7528 4444
Maitland
Andrea Coleman/Dan Yea
020 7379 5151
About JLT Lending Risk Solutions
JLT Lending Risk Solutions is the trading name of a joint initiative between Lloyd & Partners Limited and Jardine Lloyd Thompson Limited both companies are authorised and regulated by the FSA.
Lloyd & Partners Limited and Jardine Lloyd Thompson limited are part of the Jardine Lloyd Thompson Group of companies, a leading risk management adviser, insurance and reinsurance broker and a major provider of employee benefits administration services and related consultancy advice.
Jardine Lloyd Thompson Group plc is quoted on the London Stock Exchange and employs 6,000 people worldwide and through JLT NetworkTM provides our insurance broking services in more than 120 countries.
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