By Sarah Thompson, Managing Director, Mortgage Scout

Compared with a decade ago, today’s first-time buyers are older, more likely to buy with a partner and more likely to have dependent children. This highlights how getting on the property ladder is becoming increasingly hard for younger borrowers. However, lenders are always introducing new propositions to ensure solutions are in place to help prospective homeowners buy their first property. It could be you who helps them!

The 1980s, perhaps best known for its music and the invention of Super Mario, was a time when the average house price was £22,676 and the average deposit was £3,000. Fast forward to 2018, and we see a completely different picture: the average house price is £224,353, and the average deposit costs you £34,000. This shows a whopping growth of around 890% in house prices! However, wage growth hasn’t seen the same hike, so it is no surprise that borrowers are continuously finding it harder.

For many, the Bank of Mum and Dad seems like the only option. According to the Social Mobility Commission, over 30% of UK households with dependent children hold assets that could be used towards a deposit to purchase a home. This could lead to an increase in the number of first-time buyers turning to help from their family. The Social Mobility Commission’s research suggests this could rise to nearly 40% by 2039/40. Do you hold assets that could give your loved ones the gift of a lifetime?

Joint borrower, sole proprietor mortgages (JBSP)

JBSP mortgages are one solution that may help. They’re aimed at bridging the gap between salaries and house prices and are geared towards helping close family members get onto the property ladder or move home. Lend a helping hand to your children’s plans of purchasing their first home!

Joint borrower, sole proprietor mortgages allow you to support your family by adding your name to the mortgage, increasing income and increasing the maximum loan available. A JBSP mortgage is a financial arrangement where up to four individuals can jointly secure a mortgage, but only one person legally owns the property.

This type of mortgage is commonly chosen by parents who wish to help their children step onto the property ladder, but it’s also used by siblings or friends combining their incomes to buy a house with only one residing in it.

A key aspect of JBSP mortgages is that while all borrowers are jointly responsible for the mortgage repayments, reducing the risk for the lender, there’s also a collective liability. If one borrower fails to pay, the others must compensate for the shortfall. It’s, therefore, essential to enter into a JBSP mortgage with trusted individuals and clearly understand each other’s financial situations.

Only the sole owner of the property, the proprietor, is listed on the title deeds. This means other borrowers have no legal rights to the property or any increase in its value. Lenders usually stipulate that this individual must reside in the property. This arrangement is ideal for those who want to assist with a property purchase without retaining a long-term interest in it, allowing for an easy exit when the proprietor can take on the mortgage independently.

In terms of operation, JBSP mortgages are similar to standard mortgages. To evaluate affordability, lenders assess all borrowers’ financial circumstances, including income and outgoings. Borrowers must also meet the lender’s specific criteria, such as age limits and creditworthiness. The age limit for a JBSP mortgage typically caps at 70 or 80 years at the end of the mortgage term. When the initial fixed-rate or discount period ends, the sole owner has the option to remortgage solely in their name.

One of the advantages of a JBSP mortgage is its potential impact on Stamp Duty. Generally, purchasing a property with someone who already owns a home attracts a higher Stamp Duty rate. However, under a JBSP mortgage, the non-owning parties don’t trigger this additional charge.

Planning for unexpected scenarios, such as illness or unemployment, is prudent, like any mortgage. Income protection insurance can effectively ensure mortgage repayments and other bills are covered during such times.

Raising a deposit

Affordability is not the only challenge to first-time buyers and joint borrowers; sole proprietor mortgages may not be the best solution for everyone, so there are other options you may want to consider. If your loved ones cannot raise a deposit, you can still help. You can use your property or savings as security for their mortgage instead of gifting them a deposit. Many lenders are offering these types of products, too.

Embracing science, data and ecological expertise will help developers rise to the challenge of new biodiversity net gain (BNG) requirements, say environmental specialists at Fera Science. 

Under the Town & Country Planning Act (TCPA), from 12 February 2024, most developers in England must evidence how they will deliver at least 10% BNG, for 30 years minimum, for each new site.  

This involves assessing and calculating initial biodiversity levels, using the mitigation hierarchy to build an effective biodiversity gain strategy, and creating a bespoke habitat management and monitoring plan for the long term. 

Harnessing environmental science within every step will be key to developers’ success, says Paul Brown, senior remote sensing scientist and geomatics surveyor at Fera. 

“Developers are being confronted with the urgent need to capture highly accurate, biodiversity data which they can translate into effective net gain strategies. 

“A scientific approach is vital – so, it is essential for developers to invest in ecological expertise to help them put effective nature protection measures in place, and meet incoming BNG targets as smoothly as possible,” he says. 

With over 100 years of scientific learning, research and development, Fera is collaborating with housebuilders to understand and navigate BNG policy changes with a tailored support service. 

“Our LAND360 land assessment service connects developers with Fera’s team of ecologists, economists, GIS and remote sensing experts, to help them create and deliver a fully-informed 30-year biodiversity gain plan,” explains Mr Brown. 

“We use remote sensing technology, mapping and geographic information systems (GIS) to carry out a thorough desk-based habitat assessment, without the need for initial on-site investigation. 

“These detailed insights help us build a science-based biodiversity baseline, from which we can forecast the impact of on-site and off-site BNG strategies, to help developers put the right plans in place that continue delivering at least 10% gain,” he says. 

According to legislation, developers who fail to account for BNG in their plans will face delays or even rejection of their applications, so getting credible advice is vital for developers and planners. 

“Investing in scientific support with BNG planning will not only help developers meet industry-wide regulations smoothly, but also help demonstrate a true ‘nature first’ approach to sustainable development, backed up with genuine expertise.” 

To find out more about how Fera and the LAND360 service is helping housing developers, visit https://www.fera.co.uk/land360-housing-developers