The UK Home
Builders Federation (HBF) and the Council of
Mortgage Lenders (CML) have created the scheme, which will see
mortgages on new build homes underwritten by house builders and the
UK Government. By insuring the risk of default losses, the scheme
allows lenders to offer 95% loan to value (LTV) mortgages on new
The JLT Group will manage and develop the scheme through a joint
initiative of its operating companies, Lloyd and Partners Limited,
JLT Specialty Limited and JLT Insurance Management (Guernsey)
Limited, which will run a captive insurance company for HBF.
Nick Wild, Managing Director of JLT Insurance Management
(Guernsey) Limited, said: "I am delighted that after more than
two years of development work by JLT, this very substantial project
is now to be implemented. Guernsey's Protected Cell Company
legislation will be used to create an insurance company which it is
anticipated will operate with between 50 and 100 cells."
Steven Rance, Partner of JLT, said, "This risk management
solution, created in response to the reduced availability of
mortgage funding for homebuyers with small deposits, will reduce
lender risk at higher LTV ratios and so allow lenders to offer 95%
LTV mortgages for new home buyers at more competitive rates.
"The UK's major lenders and house builders are all
supporting the scheme which is being backed by the Government and
is expected to launch in March. This is an extremely timely and
exciting development for lenders, builders and the UK housing
Before the launch JLT will be developing the legal framework,
scheme structure, insurance company and management information
systems with this initial scheme expected to run for 3 years.
Stewart Baseley, Executive Chairman of the Home Builders
Federation, said: "The lack of high loan-to-value mortgages
has been a major constraint on new home sales for the last four
years. The indemnity scheme should provide a significant boost to
new home sales over the next three years. Everyone involved in the
scheme is now working very hard to ensure customers and home
builders gain maximum benefit. HBF is therefore pleased to have
appointed JLT whose experience and expertise will be crucial to the
Dominic Burke, Group CEO of Jardine Lloyd Thompson Group plc,
said: "This is an excellent example of JLT working with its
clients and stakeholders to provide innovative solutions, in this
instance not only addressing the needs of the client but also their
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