In February 2020, 415 advisers were looking for the mortgages, by 2021 this leaped up to 692, before hitting 940 in 2022, according to broker sourcing tool Knowledge Bank.
JBSP mortgages allow third parties to contribute to a mortgage, but they won’t be named on the title deeds and have no legal stake. This allows the named borrower to access more money and get help with repayments, without having to share ownership of their home.
They are most commonly used by first-time buyers who cannot afford to buy a property on their own, but have a financial backer, like a parent, who can add their weight during the affordability assessment given the increasingly high financial bar that most first time buyers face.
David Hollingworth from L&C Mortgages said: “JBSP has become a much more widely available product as lenders recognise that it could play a bigger part for today’s first-time buyers.
“The pandemic has only seen house prices surge higher again which is unlikely to remove the reliance on Bank of Mum and Dad.
“Lenders will generally prefer parents to boost borrowing ability by being a joint borrower rather than sit in the background as a guarantor but that brings potential stamp duty and capital gains tax implications.
“As a result JBSP is a product that will potentially find a wider audience as first-time buyers continue to grapple with how to make the first step onto the ladder.”
Rob Peters, principal at Simple Fast Mortgage, added: “JBSP is the modern day equivalent of a guarantor mortgage, widely offered by a number of mortgage lenders including some on the high street, albeit with differing criteria around maximum age and occupancy rules. As a specialist mortgage practice, we use JBSP fairly regularly with our clients.”
More self-employed borrowers are using JBSPs
It is not just first-time buyers using the deals. Self-employed people who are trying to use the help of family to get mortgages after the pandemic are a growing sector of borrowers, according to Knowledge Bank.
Operations director Matthew Corker said: “We are seeing increasing interest from self-employed borrowers.
“This comes as a range of new products have been popping up for those with smaller deposits: The return of 95 per cent loan to value (LTV) mortgages, and shared equity loan providers such as Proportunity offer another route to purchasing.
“This coupled with difficulties for those who have recently become self-employed may be driving the searches for JBSP products.”
Dodging duty
Rhys Schofield, managing director at Peak Mortgages and Protection, has seen an uplift in popularity of JBSP mortgages for other purposes.
He said: “We see them quite a bit where maybe an unmarried partner owns a house already that they want to keep, but their new partner is a first-time buyer.
“If they’re both on the title deed they’re liable to pay an extra three per cent of the purchase price as stamp duty, so it’s a really nifty way to use both incomes for affordability on the mortgage but not get hammered on the duty.”
Despite an increase in popularity, there is room for more providers in the market, according to Schofield.
He said: “I do wish more lenders offered them as it’s still a bit niche but there are some lenders who have made a very strong name with offering JBSP. Skipton and Barclays tend to be our most commonly used lenders.”
Not a magic bullet
However, Lewis Shaw, owner at Shaw Protection Services, has not seen a noticeable increase in demand.
He said: “JBSP for me personally are at the same level as they have been. They’re not the magic bullet a lot of people think they are often due to the age of the eldest applicant which then reduces the maximum term for the mortgage.”
