The majority (83%) of first-time buyers in the UK currently house-hunting have had no financial support from their parents, new research commissioned by Saffron Building Society has revealed.
The study of 500 first-time buyers actively looking for the first home showed that 82% had found it difficult to raise the deposit and upfront costs of a mortgage, just as reports are showing the decline in house prices since before the pandemic began.
A raft of lenders began to release new 90% loan-to-value (LTV) first-time buyer products in late 2020, with many following suit this year.
John Penberthy-Smith, chief commercial officer at Saffron Building Society, comments: “We were initially surprised that a large number of first-time buyers had received no financial support. However, with many workers furloughed, the country in a recession, and ongoing fear over more job losses, it is understandable that parents may want to sit on their nest egg savings for their own financial security.”
The results coincide with Saffron Building Society’s launch of two brand-new first-time buyer mortgages. Both products, a two-year and five-year fixed rate that offers a 90% LTV are available exclusively through a mortgage broker.
Additionally, the mortgages will offer free valuation and no arrangement fees, reducing the upfront costs and ideal for those struggling to raise funds. The mortgage also offers the option to have a deposit gifted from any close family member.
Penberthy-Smith adds: “We are delighted to offer a free valuation and have removed the arrangement fee, reducing the upfront costs to the buyer.”
“Saffron has always accepted gifted deposits across all our mortgage products. It must be a close family member, but that includes nan and grandad – who we have identified in the past as a common source of first-home financial support.”