Meeting modern borrowing needs with smarter JBSP lending – Pearson

They work by allowing borrowers to join forces with their parents, siblings or grandparents to boost their borrowing power for affordability purposes while remaining the sole legal owner of the property.

Although the supporting borrowers are named on the mortgage application, they actually have no legal ownership of the property and only serve to enhance the purchasing power of the main applicant.

Demand for JBSP products has grown significantly over the last few years, as first-time buyers have sought alternative mortgage solutions to help them navigate affordability challenges and escalating house prices.

A change in the borrower profile 

More recently, however, there has been an uptick in enquiries from other borrowers, such as married and cohabiting couples looking to take out a JBSP mortgage, not just first-time buyers looking to purchase their first home.

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In many of these cases, the borrowers are seeking a JBSP mortgage as they are tied to another property that they cannot leave due to familial or financial reasons, or because they want to avoid paying an additional stamp duty surcharge for being a second homeowner.

There are many reasons why a borrower may find themselves in this kind of situation. For example, one half of the couple may own another property, such as a buy to let (BTL) or a small flat they wish to keep and rent out as part of a long-term investment strategy. However, now they are in a long-term relationship with another person, they may wish to buy a property to move into to live with their partner.

In another situation, one of the borrowers may want to buy a new property with their current partner following a previous relationship breakdown or divorce. However, they may also want to remain on a previous mortgage for the sake of their children or because their former partner cannot cover the mortgage payments alone.

Whatever the circumstances, having another property in the mix means one of the borrowers will be treated as a second-time buyer and, as a result, face a hefty stamp duty bill, further stretching their affordability and finances.

The financial benefits of a JSBP mortgage 

In some cases, taking out a JBSP mortgage may allow buyers to avoid the additional 3% stamp duty surcharge by structuring the purchase so that only the non-homeowner is named on the title deeds, while both parties remain on the mortgage.

This potential saving can free up funds for renovations or other costs linked to buying a home. However, this should not be the main reason for choosing such a product, and it highlights the importance of seeking proper advice before making any decision. 

In response to the growing demand for JBSPs, for the range of reasons already outlined, we’ve recently updated our criteria to allow couples to take out a JBSP mortgage with one named borrower, enabling them to purchase a property they can both live in. 

This change creates new opportunities for borrowers who already own a property in the background to re-enter the mortgage market and consider homes that may have previously been out of reach. It also gives brokers a valuable opportunity to explore JBSPs as a suitable option for clients, helping them make informed, financially sound decisions. 

Of course, there are other important factors borrowers need to consider before taking out a JBSP mortgage, such as the fact that the party who already owns a property will not be named on the title deeds of the new home. Therefore, it’s essential that clients seek legal advice before proceeding and only enter into such arrangements with a trusted partner or spouse. 

As the mortgage landscape continues to evolve and affordability pressures rise, adapting products to meet the needs of today’s borrowers is crucial. For JBSPs, that means moving beyond first-time buyers and extending support to a wider demographic, including divorced or separated individuals, investors, and blended families – complex circumstances where brokers and specialist lenders really come into their own.