Deposit help for parents buying with Barratt in Bristol

Parents looking to put down a deposit to help their children buy a new home from Barratt, in Bristol, will now be able to apply for an unsecured personal loan of up to £50,000 from Hitachi Capital (UK) PLC, it was announced today.

The tie-up means that for the first time parents can borrow the money to help their children onto the property ladder without either having to re-mortgage or put a second charge on their own homes.

The product is the only one of its kind currently on the market and is specifically designed to address current mortgage restrictions. Significant numbers of creditworthy first-time buyers are largely dependent on parental support because they do not have the 20 or 25 per cent deposit which lenders now require.

But many parents – who regard home ownership for their children as a sensible medium-term investment – are often reluctant to fund a deposit if any loan has to be secured against the principal family property.

Under the Hitachi Capital loan scheme, the typical buyer will only need to raise a deposit of five per cent. An 80 per cent mortgage is available from a number of High St lenders. And the remaining 15 per cent of the purchase price can be met through an unsecured loan from Hitachi Capital (UK) PLC to the buyer’s parents or legal guardian.

Hitachi Capital (UK) PLC is offering unsecured loans of up to £50,000 for a period of 12 years at a fixed rate of 5.4 per cent. There are no early repayment charges and unlimited overpayments are allowed at any time during the agreement without penalty.

Andrea Pilgrim, sales director of Barratt, said: “This product is ideal for parents who have sufficient income to service a loan but no available capital. Or people who have capital which is tied-up and which they do not want to access in the short-term.”

Gerald Grimes, managing director of Hitachi Capital (UK) PLC, said: “This innovative Barratt loan gives parents an affordable option to support families getting on the housing ladder without dipping into hard earned savings.”

Parents or former guardians who wish to assist their children with a home purchase from Barratt will be eligible for the loans. Applicants must be UK residents, homeowners and have a good credit history.

For more information, visit: barratthomes.co.uk