In case you imagined from the previous piece that all housing roads to serfdom are just for renters, I should point out that mortgagors are also able to journey on the same road. ‘Halifax’ is quoted as indicating that:
the number of first-time buyers taking out mortgages has nearly doubled in a decade, from 192,300 in 2008 to 372,000 in 2018. Some lenders are also relaxing rules to win over new borrowers.
Around 20, including Barclays, Metro and Clydesdale, now allow buyers to add parents and family members to their mortgage application. Some lenders even offer 100 per cent loans if relatives agree to deposit savings with them.
That of course means the parents and family members are able to provide additional collateral for the banks and if the mortgage is ‘savings conditional’, then those savings will definitely be vulnerable in the event of any default.
What’s not to like?
For the banks.