Hitachi Capital offering loans of up to £50k to parents of first time buyers.

Hitachi Capital, the Financial Services group has teamed up with Britain's biggest housegroup, Barratts, to offer loans of up to £50,000 to the partents of first-time buyers in an innovative attempt to boost Britain's flagging housing market, according to reports in the Daily Telegraph.

Hitachi's £1bn fund will offer 12-year unsecured loans for parents to use as part of the deposit for their child's new home.  The scheme aims to bring back to the market first-time buyers, who have been priced out by mortgage lenders requiring deposits of up to 20%

 

The average age of first-time buyers has jumped to 37, with lenders reluctant to offer higher loan-to-value mortgages.  This has let to "the bank of mum and dad" becoming increasingly prevalent as a source of funding for deposits.  However, many parents cannot afford to support their children or only do so by remortgaging their own home.

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