Vida Homeloans has launched its Helping Hand product to assist parents in getting their children onto the housing ladder without being on the title deeds and jointly owning the property.
This means that no stamp duty surcharge is payable by parents and the child could take advantage of stamp duty being abolished for first-time buyers purchasing homes priced up to £300,000.
In joining the Joint Borrower Sole Proprietor (JBSP) market sector, Vida’s Helping Hand allows parents to help their child by allowing them to be a joint party to the mortgage and have their income taken into account as part of the affordability assessment. A JBSP can also provide an exit strategy when the child’s income increases and they can afford the loan in their own right.
Vida’s Helping Hand is available up to a maximum of 90% LTV for first-time buyers, can be combined with gifted deposits, the self-employed and a maximum of four applicants buying together, across the wide range of Vida’s Plus rates and specialist lending criteria (including less than perfect credit profiles).
Parents will be jointly and individually liable for the mortgage along with the occupiers (child and any partner) in maintaining the repayments.
Louisa Sedgwick, director of sales – mortgages at Vida Homeloans, said: “At a time when first-time buyers are facing significant affordability constraints and house prices continue to rise, we think that Vida’s Helping Hand mortgage will provide a new and interesting option for mortgage intermediaries who want to provide solutions to parents trying to help their children onto the housing ladder.
“It combines the advantages of a Joint Borrower Sole Proprietor mortgage with our specialist approach to customers who may not fit the criteria currently demanded by high street lenders.”
Craig Hall, new build manager at Legal & General Mortgage Club, added: “Our recent research shows that this is an important factor for the first time and next time buyer market and it is refreshing to see new lenders like Vida supporting this part of the mortgage market with their Helping Hand product.
“This combined with all the other elements of Vida’s criteria makes this a great proposition for intermediaries, further highlighting the need for independent advice and the value of a broker.”