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Borrowing from daddy to stoke up the land market

Written on . Posted in Banking.

House builder Barratt has teamed up with
Hitachi Capital to offer £50,000 loans to parents wanting to buy Barratt
homes for their children.

Barratt’s tie-up with the UK financial services arm of the
Japanese conglomerate will see the creation of a £1bn fund that will
offer 12-year unsecured loans for parents to use as part of the deposit
for their child’s new home.

The aim is to allow parents to help
their children get onto the property ladder without having to
re-mortgage or put a second charge on their own homes.

The average
age of an first-time buyers without help has jumped to 37, since
lenders are reluctant to offer high loan-to-value mortgages.

Under the Hitachi Capital loan scheme, the typical buyer will only need to
raise a deposit of five per cent. An 80% mortgage is available from a
number of high street lenders. The remaining 15% of the purchase price
can be met through an unsecured loan from Hitachi Capital to the buyer’s
parents or legal guardian.

That should help to stoke up the housing market.

Read more: http://www.propertyweek.com/5011387.article#ixzz1AxBCPSxv

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