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Lending down, but the desire still burns!

The footprint of Brexit seems to be heavy still.

Some official statistics out recently seem to suggest that as Britons considered our place in Europe, mortgage lending was very far from people’s minds. Anxiety perhaps? Understandable. Fear of the future? Who knows?
The figures from the Council of Mortgage Lenders show that home-owners  borrowed £10.6bn in July – 13 per cent less than in June – with the total number of loans falling 14 per cent.
Happy Family pic
The most pronounced dip in lending, said the CML, was among first-time buyers who borrowed 19 cent less than in June.
This compares with data earlier in the month from the Office of National Statistics which suggests there was a dip in house price inflation in July from 9.7 per cent the previous month to 8.3. CML boss Paul Smee was quick to point out that it is too early to tell if these figures were a Brexit Blip or a sign of a more long-term cooling in the market.

Interesting or not, depending on your point of view, it is hard to envisage that the desire among first-time buyers to get that treasured set of house keys has in any way dimmed. And while there is demand, the need for lenders to offer creative solutions that enable first time buyers to move into a home of their own will continue.  That’s why we designed our Family Mortgage to enable family members to help their offspring acquire that longed-for first home without endangering their own capital.

We talked to 25-30 year olds and they told us that they do not want to adversely impact their parents’ finances if they lose their job through no fault of their own and they are forced to sell their property at a loss. This was particularly true of people who had been brought up mainly by a single parent. That’s why the Family Mortgage comes with a built-in six months payment waiver if you lose your job through no fault of your own. We can also offer you and your family a leg-up with our Helping Hand Saver account which offers relatives a uniquely easy way of putting aside some money to invest for the future of the next generation.

But there’s more…
• We can accept gifted deposits so the first time buyer doesn’t have to try to pay rent and save the deposit at the same time.
• A family inclusive and friendly offering – different family members can all do their bit (e.g. grandparents could put up cash, parents can offer a charge over property, and both families can help if it’s a joint purchase). This is not just mum & dad, but auntie, uncle and grandparents too.
• A stamp duty friendly loan that is in the first time buyers’ name(s) so the 3% charge for second properties is not incurred by the family members helping.
• The ability to offset a loan where cash is used as security, with payments calculated on the net loan giving a real cash benefit to the borrower.

Using the options available, a family could help a young person into their own home using a relatively small amount of cash:  a gift of the 5% deposit and a charge over their property for 20% could get a first time buyer immediately into their own home, leaving the family cash intact. Find out more about our family friendly mortgages for first time home buyers here.

So damn the statistics and press on with your plans!?

By Steve McDowell

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Family Building Society
Ebbisham House
30 Church Street
Surrey KT17 4NL
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