Barclays Mortgages has made changes to its Family Springboard Mortgage, removing the need for borrowers to put down a deposit when purchasing a home.
Those looking to buy a home for the first time no longer need to provide a deposit themselves, only the 10% contribution from a relative or guardian; this effectively replaces the deposit requirement from the borrower. Previously a 5% deposit would have been required from the first-time buyer to secure a Family Springboard mortgage.
Recent first time buyer research carried out by Barclays Mortgages found that 35% of prospective first time buyers are forced into asking their parents for help when securing a mortgage. Of these, 20% who accept help, see the money as a ‘gift’ that doesn’t need to be paid back.
Barclays says its Family Springboard proposition was designed to remove this issue. A first time buyer takes out a mortgage, and instead of gifting the deposit, the family helper opens a Helpful Start account linked to the mortgage into which they deposit savings equal to 10% of the final price of the house. After three years the money in the account is returned to the family helper with interest.
Income multiples will also be raised for Family Springboard Mortgage customers with an income of more than £50,000, moving up from a maximum of 4.4 times their annual income to 5.5x.
Raheel Ahmed, head of Barclays Mortgages, said: “With over a third of young people still turning to their family for help with buying a home, we have increased the accessibility of the Barclays Family Springboard Mortgage. We want to offer more people a way to get on the property ladder and to walk through the door of their first home earlier than they perhaps thought.
“Buying a first home is a hugely important step in everyone’s life and one that has unfortunately become tougher for many in recent years. When Barclays originally launched the Family Springboard mortgage in 2013 we made the decision to help both homebuyers and the family who wanted to support their children, but couldn’t just give away large sums of money.”