New mortgage where sellers gift half the FTB's deposit

A new scheme has been launched to help first-time buyers.

It involves sellers matching the first-time buyer’s 5% deposit, so that altogether the buyer has a 10% deposit, as required by most lenders.

The ‘5&5’ scheme has been launched by independent mortgage broker Obligo.

The scheme is being made available via estate agents who bring buyers with a 5% deposit together with motivated sellers who are prepared to gift the buyer the extra 5% required in return for a reasonable selling price and a quick sale.

The scheme is currently being rolled out in a number of estate agencies around the UK, including Liverpool-based Andrew Louis estate agents and Fortis Properties in Cardiff.

A number of 5&5 sales have already been completed.


Vendors who wish to opt in to the scheme instruct the Obligo partner agent to sell their home. The seller then matches the deposit with 5% of their own equity (no cash required). Next, the buyer takes out a mortgage, with help from Obligo, to secure their property.

Chris Gardner, director of Obligo, said: “Brokers and agents have a choice. They can sit around and wait for the market to come back – and good luck to them – or they can innovate and work together to find solutions and drive sales. We fall very much into the latter category.

“The 5&5 scheme is turning prospective buyers into buyers, which is what agents and brokers want to see. It’s a great example of brokers working with agents to take control of the market rather than be dictated by it.”

 
Louis Anastasiou, of Andrew Louis estate agents in Liverpool, said: “The 5&5 scheme is helping the first-time buyers of Liverpool finally get on to the property ladder, as it gives them the necessary deposit and makes homes much more affordable.

“At the same time, in what can be a stagnant market, we are giving vendors who may be having trouble selling their homes an opportunity to do so. As well as facilitating sales, it has been great at driving footfall and enquiries.”

There are currently around 50 estate agents partnered with Obligo.