Gallagher hails new reinsurance-backed scheme addressing gap in mortgage market

Gallagher Re has hailed the new and innovative reinsurance-backed mortgage indemnity scheme designed to address a gap in the mortgage market. The broker believes that this project underlines the key role insurance can play in addressing important social challenges and enabling change.

New mortgage indemnity scheme 'Deposit Unlock' has officially launched with its first lender Newcastle Building Society.

Gallagher Re, which worked in partnership with the Home Builders Federation (HBF) to devise and administer the scheme on behalf of its members, applauded the house builder community for its “cross-industry collaboration” in leading the development of a new, long-term, sustainable solution to address the lack of availability of high LTV mortgages for new build properties.

“This project underlines the key role that insurance can play in addressing important social challenges and enabling change. And it is testimony to the skills, experience and expertise of a team that has a superb track record in devising and delivering critical mortgage solutions, both in the UK and internationally, during times of both global financial crisis and economic boom,” said Tom Wakefield, CEO designate at Gallagher Re.

Deposit Unlock is backed by 17 HBF house builder members – responsible for more than 60 percent of new UK house production – with over 20 mortgage lenders engaged in the project. Many are expected to go live with their own 95 percent LTV mortgages for new builds in the coming weeks and months.

Steven Rance, managing partner of mortgage indemnity reinsurance at Gallagher Re, said: “At a time when successful government interventions like Help to Buy, which have supported low deposit buyers, are being phased out and raising a deposit remains the single biggest barrier to realising the dream of home ownership, the house builder community stepped up to the challenge.

“For the past year, the HBF has worked with us to devise a scheme that will substantially increase access to new build ownership, backed by reinsurance and supported by mortgage providers. It is a fantastic example of cross-industry collaboration bringing house builders, lenders and the insurance industry together for the common good.

“With the insurance indemnities effectively funded by the house builder community, Deposit Unlock is a long-term, commercial and sustainable solution that comes at no cost to the taxpayer and significantly reduces the risk for lenders – essentially unlocking the return of 95% LTV mortgages in the new build space.”

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