One of the UK's major lenders has launched a brand new scheme aimed at boosting the first-time buyer market in 2013. Barclays'‘Family Springboard' scheme aims to offer affordable mortgage deals to new buyers with just a 5% deposit.
The bank says that it is offering first-time buyers"access to the cheapest ever deals we've been able to offer" and hopes the scheme will give a boost to the UK's property market.
Figures from the Council of Mortgage Lenders show that there were just 175,700 first-time buyer mortgages in 2012, down from the peak of 308,400 in 2007. Barclays believes that it is the size of the deposit required that has hindered first-time buyers over recent years and hopes that the launch of their new 95% loan scheme will help.
The scheme comes in two parts. If you're a first-time buyer you can benefit from a 95% mortgage at a rate of 4.69% fixed for three years. The second part of the scheme requires your family to open a savings account linked to the mortgage into which they deposit 10% of the purchase price. At the end of the three-year fixed rate the savings are returned to your family.
"If you have family that have savings which they are happy to commit for three years then this is a very useful scheme," said Keith Osborne, editor of whathouse.co.uk. "It allows parents to help their kids onto the property ladder, safe in the knowledge that their savings will be returned to them in three years time. I am hopeful that this and other similar schemes can provide the boost to the first-time buyer sector that the UK property market needs."
Barclays are also cutting the cost of their mortgage deals having been able to secure cheaper borrowing rates through the government's Funding for Lending Scheme. For example, if you have a 30% deposit you can now access a three-year fixed-rate deal at 2.89% or a two-year deal at 3.39%.
"This is a real boost for UK homebuyers with small or large deposits as we are giving them access to the cheapest ever deals we've been able to offer, brought about by the combination of the low base rate and the Funding for Lending Scheme," said Andy Gray, managing director of mortgages for Barclays. "We've listened to our customers and need to continue to drive confidence in the housing market, the new family scheme and today's slashed rates will encourage people to think about buying or moving home, which in turn will help the economy move forward."
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