Buy A Home in Beckenham with 0% Deposit
Zero deposit mortgages are backâ€¦if you have wealthy parents!!!
Barclays have launched a new product to home buyers where they do not need a deposit provided their parents are prepared to save 10% in a special savings account.
How will this work you may ask?
The parents will open the account in their name and provided the child keeps up with the mortgage payments the cash will be returned to them in 3 years with 2% annual interest added.
Hopefully, this will help some first time buyers get onto the market as the average deposit is now exceeding Â£28,000 creating a barrier for them. Apparently, one third of all young buyers are now accepting financial help from family which was what prompted Barclays to launch this deal.
While this news is great for many young buyersâ€™ politicians are condemning this product as it penalises young people who have managed to save their deposit without any parental assistance.
Under the new deal individuals or couples with an income of Â£50,000 or higher can borrow a maximum of five and a half times their income, up from a maximum income multiple of around four and a half for other borrowers. Those taking part in this deal could potentially buy a property which is at least Â£50k more expensive than other buyers with identical salaries and deposits.
With the higher stamp duty charged to buy to let investors this is a boost to the market that estate agents are looking for. How many parents will be prepared to do this is anyoneâ€™s guess but those who can afford it can help their offspring get onto the ladder and achieve some growth on their money as well.
Usually where one bank leads others will follow. We will wait to see who is the next one to follow and see what they offer! Watch this space!