Three cheers for Barclays!
Tony Ward is managing director of Home Funding
I think it was way back in October last year that I wrote about the need for lenders to look at developing more innovative products in the first-time buyer arena.
This was amidst a set of depressing statistics which suggested that it can take up to eight years for the average first-time buyer to save up for the required 20% deposit.
Whilst the Funding for Lending Scheme has proved to have made a positive impact in terms of increasing mortgage availability, with a 26% net balance of lenders reporting a rise in lending, it has done little to assist the more ‘risky’ high end LTV borrowers (notably first-time buyers). Lenders on the whole have admitted to ‘cherry picking’ and remaining cautious about who to lend to
So hats off to Barclays then for coming up with a product that really seems workable for this target market.
Without going into too much detail, it means that provided parents can stump up 10% of the asking price of the property, their children will need to put down only a 5% deposit to qualify for the mortgage.
The ‘Springboard’ mortgage will be available from next week and I think it will be appealing to the Bank of Mum & Dad.
Why? I think the fact that to access this deal requires a significantly smaller savings vessel is attractive to the ‘squeezed middle’ unlike other schemes which have gone before which have require a much greater input.
This will hopefully open the floodgates to other schemes becoming available.
After all this is the market which needs the most amount of help.