Tuesday 29 January 2019 2:31 AM UTC
LONDON Jan 29: Britain’s biggest lender is to offer 100% mortgages to first-time buyers in a return to lending last seen before the financial crash – but only if the buyer has family that can stand behind the loan.
Under the new Lloyds Bank “Lend A Hand” deal, a first-time buyer will be able to borrow up to £500,000 for a new home, without putting down a penny of deposit.
The Lloyds move marks a major expansion into the first-time buyer market, as most other mainstream lenders demand a minimum deposit worth 5% of the property purchase price, although Barclays has offered a similar “family springboard” deal. Lloyds has priced the mortgages to undercut the Barclays offer.
The deal – part of what Lloyds said is a £30bn commitment to help first-time buyers – will reopen concern about a two-tier market where buyers with well-off families can elbow aside those without.
Saving for a deposit is usually cited by first-time buyers as the biggest hurdle to home ownership.
Lloyds saidthe average deposit put down by first-time buyers has climbed to £33,211, and a staggering £110,182 in London.
The Lloyds deal requires that a member of the family – such as parent, grandparent or close relative – helps out.
The bank will only grant the 100% mortgage if the family member puts a sum equal to 10% of the value of the property into a Lloyds savings account.
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