Borrowers have also been affected, particularly first‐time buyers, who already found it hard to get on to the property ladder.
The lockdown clearly exacerbated the problem, as many lenders withdrew higher loan to value (LTV) products from the market.
With a small number of lenders now returning to the market with higher and in some cases restrictive LTV offerings, first-time buyers are still very limited when it comes to product availability.
On the face of it brokers also appear to be hamstrung in helping their clients get that first foot on the property ladder.
How they work
In the current market, mortgages with family support can offer a great opportunity for brokers to help their clients.
For some reason these types of mortgages are often overlooked by brokers even though they offer first time buyers an effective way of gaining a foothold on the property ladder.
There are a small number of lenders that currently provide these types of products.
Although each product is different the fundamentals remain the same – to secure a mortgage, the lender will take a security from a family member in the form of a charge on their main residence or via a cash deposit.
Unlike some higher LTV products, these tend to be available to the whole of the market and not restricted to a select panel of brokers.
Family assisted mortgages clearly provide a viable solution to first‐time buyers whose relatives want to help them get on the property ladder.
For brokers, they represent a great opportunity to educate clients about products that fall outside of the traditional criteria set by many lenders.
First‐time buyers continue to face a triple whammy of increasing property prices, lack of affordable housing and large deposit requirements.
Through these products, brokers can give first-time buyers access to a solution that may overcome the obstacles to home ownership.