Mortgage News
Halifax to end guarantor deals
Halifax will stop offering its guarantor mortgage facility from March, due to reduced demand from brokers and consumers.
The feature allowed parents to act as guarantors for their children when buying their first home.
Halifax said the popularity of its other products, such as its Lloyds TSB Lend a Hand mortgage, which launched in May 2009, had overtaken the interest in the guarantor feature.
Lend a Hand mortgages, which are only available direct, mean that borrowers only need a 5% cash deposit and the backing of a person who has savings equal to 20% of the property value.
A spokeswoman for Halifax said guarantor mortgages only represented a tiny proportion of new business for Halifax.
She added: “We will look to find ways to extend the Lend a Hand activity which already accounts for a third of first-time buyer lending in the Lloyds TSB channel.”
Simon Webster, managing director of broker Facts & Figures, said he was surprised at the move as guarantor mortgages were an easy way for people to gain access to the housing market.
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He added: “Halifax has to make a financial decision and I would not blame it for pulling the product if it feels it is not commercially viable. Brokers will be affected though, because Lend a Hand is only available direct and the number of lenders who offer guarantor products has fallen.”