Current account and offset mortgages will account for 20% of gross advances by 2008, according to a report from Datamonitor. The market analyst predicted the development of family offset mortgages will prop up the first-time buyer market, and that the products will become increasingly popular.
Karina Purang, financial analyst at Datamonitor and author of the report, said: “”The introduction of family offset mortgages has brought a breath of fresh air to first-time buyers. For parents who have a certain amount of savings and are willing to help their offspring to get a foothold on the property ladder, this is a good way to do so.””
Purang acknowledged rising house prices have put an enormous strain on first-time buyers. As a percentage of the market, Datamonitor said they have dwindled from accounting for 40% of it in August 2002 to only 28% in August 2003. However, it predicts the ability to allow parents to link their savings to their offspring”s offset mortgage account will see this product double in value from £22bn now to almost £45bn in five years.