After recent research indicated that 35% of first time buyers have to resort to the “Bank of Mum and Dad” in order to get a mortgage, Barclays have updated their “family springboard mortgage” to allow parents to help their children to buy.
Barclays will no longer require buyers to contribute a deposit, heralding the return of the 0% deposit mortgage. Increasing the number of earners against which people can borrow in the banks “family springboard’ mortgage,” Barclays will instead accept a 10% contribution from parents.
So long as the buyer keeps up to date on their mortgage repayments, the 10% deposit will be returned after 3 years with interest included.
In a separate survey conducted by Experian, it was discovered that as many as 27% of those aged 55+ gave their children financial support when buying a property. Likewise, findings by Legal & General, suggests that parents are anticipated to be involved in 1 in 4 property purchases in the UK in 2016.
Barclays’ previous “family springboard mortgage” insisted that borrowers had to provide a 5% deposit with an additional “helper” contribution of 10% of the house purchase price.
The high street bank has also increased the overall borrowing amount by a multiple of a purchaser’s income, meaning that house buyers earning £50,000 are entitled to borrow up to 5.5x their income.