Aldermore has expanded its Help to Buy range to include first-time buyers with adverse credit ratings.
The lender has added two lending tiers to its Help to Buy: Equity Loan mortgage range, with level two rates starting at 4.78 per cent up to 75 per cent loan-to-value (LTV) and level three rates starting at 5.28 per cent up to 75 per cent LTV.
The government-backed Help to Buy: Equity Loan scheme offers borrowers a loan of up to 20 per cent of the cost of a new-build home, interest-free for the first five years.
Aldermore's additions mean the lender will now consider borrowers if they have County Court Judgements or defaults registered over six months, bankruptcy discharged for two years, mortgage or secured loan arrears over three months ago and forced or voluntary possessions older than three years.
Damian Thompson, director of mortgages at Aldermore, said with the average first-time buyer aged 31 years old, many of those trying to climb onto the property ladder started their careers the same year the global financial crisis began.
He said: "This group has had to navigate a hugely challenging economic climate so it is reasonable to expect some may have had credit blips, gaps in employment, and even resorted to short-term credit in the past."
Mr Thompson said he believes those borrowers that have since recovered from credit difficulties in their past should have the opportunity for home ownership.
He said: "At Aldermore, we understand getting on the property ladder is no easy feat and securing a mortgage can be a cause for concern.
"Our human approach to lending enables us to consider each case on its individual merits so we can support those people with a complex financial history or a less than perfect credit score find a home."
David Hollingworth, associate director of communications at London & Country Mortgages, said it makes sense for specialist lenders to consider how they can enable those with slight credit blips to access Help to Buy rates, especially as the scheme has now become a mainstream staple for so many lenders.
He said: "Aldermore joins the likes of Precise Mortgages and Magellan in creating Help to Buy products that might help those that need a specialist approach to their situation, which should open up more options for those who have encountered some minor issues.
"It is not likely to be an area that sees heavy demand but plugging those gaps is what the specialist lenders are good at and added competition can only help those borrowers in need of alternatives."
Chancellor Phillip Hammond extended the Help to Buy scheme in the Budget, now set to end in 2023 rather than 2021.
rachel.addison@ft.com
