Barclays has launched a new mortgage scheme which allows parents to help their children with loan affordability.
The family affordability plan allows parents’ income to be taken into account without the requirement that they also need to be on the property deeds.
This scheme is available for properties in England but not in Scotland and Northern Ireland, allowing parents and their children to pool their income in order to secure a larger loan.
Barclays are also working on another guarantor product, where parents can help their children access lower rates by using any savings the parents have as security. Other lenders already have similar schemes available so Barclays looking to enter this market is a good sign that lenders are trying to be innovative with their products in order to get the market moving.
I am of the opinion that many parents have already benefited from buying their own homes and would like to give their children a helping hand onto the housing ladder. A significant number of parents cannot afford to provide their children with the deposit to buy their first home and so schemes like those outlined above are useful tools.
Unfortunately, there has been a reduction in the number of guarantor type mortgage products in the market over the past few years, so this is very positive and I hope that more lenders follow suit.