The financial press this weekend looked at alternative options for those borrowing groups who often struggle to secure a mortgage. First Time Buyers in particular have found it harder and harder in recent years to get on to the property ladder due to rising costs and stricter criteria, but the Sunday Times and Independent on Sunday both reported on recent improvements in this area of the market. Last week saw the launch of the Barclays Springboard mortgage, in which borrowers are required to put down a 5% deposit, with a family member putting a further 10% into a ‘Helpful Start savings account for a minimum of 3 years. Brokers welcomed the news and hoped that this will encourage other lenders to join the market. For the self-employed, securing a mortgage is also as tough as ever. Brokers suggested in the Times that banks have used the Government Funding for Lending scheme to attract more borrowers, but the emphasis has remained on low risk lending and improving interest rates rather than loosening criteria. The requirement by most lenders for self employed applicants to provide 3 years accounts, and the lack of interest only mortgages – often favoured by those with an irregular income – has made it very difficult. These borrowers may wish to consider lenders with a more flexible approach to underwriting, such as Leeds Building Society and Kensington, who will accept 1 year’s accounts. Elsewhere, the Observer looked at offset mortgages as an alternative for savers disappointed by falling rates and minimal returns. There are several more possibilities available in this area than in previous years, as lenders including NatWest and Clydesdale will also allow business accounts to be linked to a mortgage, while Yorkshire Building Society and Market Harborough allow accounts of family members to be linked as well.
What the papers say – 19th and 20th January 2013