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THE SUN: Update on schemes FTBs can use to help get them on the property ladder

Journalist: Sarah Davidson, Freelance

ended 24. April 2023

The usual - list of schemes I can find myself but I need comment on 

  1. Which schemes are best for renters finding it hard to save deposit
  2. Singles struggling on mortgage affordability
  3. Got parents who'll support - what lenders offer bank of mum and dad help /JBSP
  4. General advice for FTBs at the lower end of the earning scale

It's another ASAP job……obviously. 

9 responses from the Newspage community

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David Conway
Director at Clayhall Financial Services Ltd
The Bank of Mum and Dad is a familiar phrase. Parents may not have the ready cash in the bank but if they have equity in their property then they're richer than they think and can help out with a deposit by releasing deposit money that way. When it comes to affordability for the mortgage, parents' age can be as much of a hindrance as their income helps, but it shouldn't be ruled out as it could be the key. The end of Help To Buy was a blow to first-time buyers, but shared ownership (part rent / part buy) and deposit unlock (95% mortgages) are still available, as are innovative lenders willing to involve the support of family members with deposit and income 'boosts'.
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Aaron Strutt
Product and Communications Director at Trinity Financial
It is clearly very challenging for many younger people to get on the property ladder but there are some mortgage schemes that can help.
Some banks and building societies will allow three incomes on a mortgage application, allowing people to buy with friends or relatives. JBSP has replaced the old mortgage guarantor scheme enabling parents to go on a mortgage application and boost the maximum loan size. Some lenders will offer income stretches to boost maximum loan sizes, often up to six-time salaries. Many buyers do not know about these income stretch schemes because they tend to be available through smaller and more niche lenders.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Joint borrower sole proprietor mortgages could help first-time home purchasers get on the housing ladder and are sometimes overlooked. These mortgages are available from a variety of lenders, including Barclays Bank and Metro Bank. Those who are joining the mortgage but not the title should obtain independent legal advice to ensure they understand the implications.
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Justin Moy
Managing Director at EHF Mortgages
Even with the end of Help to Buy, there are still a number of ways a First Time Buyer can get additional help to boost what they can borrow or buy.

A number of lenders offer extended affordabilty products, such as the Helping Hands Scheme from Nationwide BS, that provides extended income mulitples to those with just a 5% deposit. This boosts the amount that can be borrowed with a smaller deposit.

There are some 100% schemes, such as the Barclays Springboard and The Tipton's Family Assist scheme, where support from family in either additional security or the lodgement of family cash savings will allow the lenders help without the need of a deposit.

Using parents in a different way gives us some options with a Joint Borrower / Sole Owner mortgage, where parents income can be used to improve the amount borrowed, but avoid them having to own the property (so as to avoid Stamp Duty). This has proved a popular way of helping where older parents still have a good income.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
The chancellor was very unimaginative in his last budget in terms of helping first-time buyers and stimulating the affordable housing sector in general. With schemes like Help to Buy finished, nothing replaced them. Now, first-time buyers have got it tough. The only help from the government is a Lifetime ISA, which gives savers a 25% bonus when they pay up to £4000 per year, so long as it's used for a house purchase or retirement (after aged 60). Those with lower earnings can still look at schemes such as shared ownership as a stepping stone.
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Adam Smith
Founder at Alfa Mortgages
Undoubtedly, the most viable and sustainable option for singles struggling with affordability when it comes to homeownership is the shared ownership scheme. This scheme offers an accessible way to step onto the property ladder, with the added benefit of being able to increase ownership shares in the future through the process of "staircasing". It’s an excellent opportunity to own a home and build equity over time, making it a highly attractive option for those looking to secure their future in the property market.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
The primary recommendation is to consult with a broker regarding various schemes that can aid individuals seeking to purchase their first property. One notable program, often overlooked, is the Barclays Family Springboard mortgage. This option necessitates a family member or friend to deposit 10% of the property's purchase price into a savings account for a five-year period. If the applicant makes timely mortgage payments for the following five years, the helper will receive their principal and interest earned. Thus, the deposited funds remain secure for the person giving the money towards the savings account, provided that the mortgage payments are duly met over the next five years. Plus allowing the applicant to borrow 100% of the purchase price subject to underwriting.
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Steven Morris
Advising Director at Advantage Financial Solutions
First time buyers mostly need help increasing deposit or income. For deposit, there are still 0% deposit mortgages. Kent Reliance offer shared ownership with no deposit. Whilst lenders like Buckinghamshire offer 100% ownership, 0% deposit, but with a charge on a relative's house. You will need a really nice relative to make that one work. Skipton building society are bringing out a 100% mortgage, however the terms of this are as yet unknown. It could be, the current owner needs to sell to you the property at a discount for it to work. Other options even include taking a personal loan for the deposit with lenders like Saffron and Santander. Boosting income requires a kind soul with surplus income vs debt, joining you on the mortgage. To avoid higher stamp duty, this person can be left off the property deeds ("joint borrower sole proprietor mortgage"). Many lenders offer this, but Gen Home uniquely use up to 6 peoples' incomes as joint owners to just on the mortgage as a 'booster'.
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Amit Patel
Adviser at Trinity Finance
Joint Borrower, Sole Proprietor is a great option for first-time buyers where not all parties to the mortgage are legal owners of the property. It's a great way for parents, guardians, friends or family to support first-time buyers with affordability challenges.

Shared Ownership is another fantastic scheme available. Here the buyer buys a 'share' of the property from the housing association provider which means a smaller deposit and mortgage. They pay rent on the share they do not own. In time, the buyer may have the option to purchase additional shares, up to full ownership. This is known as staircasing.

First Homes is a government-run scheme in England designed to help first-time buyers get on to the property ladder by offering discounted housing prices. Eligible applicants will get a huge discount on house prices typically between 30% to 50% . Once the discount has been applied, it will be passed on when the property is sold, so that future first-time buyers benefit.