Springboard mortgages could be the answer for first-time buyers: Nigel Errington-Smith, ErringtonSmoth town and village properties
What I like about these new mortgage products is that, for the first time, it formalises the financial involvement and level of commitment required so everybody knows what is involved from the outset.
The average age of a first-time buyer is now 30 plus, which is a depressing prospect for young men and women aspiring to buy their own property. Springboard mortgages could be the answer for many in this situation.
In my experience, parents have always been willing to help their children get a foot on the property ladder if they can, which historically has involved re-mortgaging their own homes, handing over hard-earned savings, or standing as a guarantor.
But up until now families have rarely entered into legal agreements when it comes to lending or borrowing money. Sadly, this can all too often lead to misunderstandings over whether the money was a gift or a loan and the time scale for re-payment. Additionally, money lent in middle age may be needed later on for retirement and conflicts can arise if the cash is still tied up in their offspring's property.
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Clearly a lot of thought has been put into the design of springboard mortgages making the proposition a win-win for both parties. The products give clarity to an issue that has previously been a bit fuzzy round the edges, and as such will hopefully encourage more parents or family members to lend a helping hand to first-time buyers.
While the top end of the market continues to be relatively robust, the lack of first-time buyers at the other end has contributed to reduced activity, and anything that can help kick-start the interest in entry-level homes and provide a glimmer of hope can only be a good thing.
â For more on springboard mortgages, turn to page 4.