Brokers have hailed the timing of Barclays’ Mortgage Boost proposition as affordability continues to be a struggle for buyers.
Barclays is offering Mortgage Boost to new and existing customers, a proposition allowing family or friends to increase – or ‘boost’ – the amount that can be borrowed towards a home, without having to lend or gift money directly and without the need for a larger deposit.
For example, if you have an income of £37,500 a year and a deposit of £30,000, then the maximum you may be eligible to borrow could be £168,375, which means that you could purchase a home worth up to £198,375.
However, with Mortgage Boost and another person willing to join the application, the amount you can borrow could increase significantly.
Say a parent joins, and they also have an income of £37,500 – then you could be able to borrow a total of £270,000, allowing you to purchase a home worth up to £300,000.
BREATH OF FRESH AIR
Dariusz Karpowicz, Director at Albion Financial Advice, told Newspage: “Barclays’ new Mortgage Boost scheme arrives like a breath of fresh air in today’s challenging property market, offering first-time buyers a clever way to stretch their borrowing capacity without having to scrape together a larger deposit.
“It’s particularly welcome timing, given the current squeeze on affordability. While a few lenders have dipped their toes into similar waters, having a major player like Barclays join the party adds significant credibility to this type of lending innovation.”
And he added: “In a market where every pound of borrowing power counts, this could be the difference between young buyers securing their dream home or spending another year watching property prices from the sidelines.”
IMPRESSIVE PRODUCT
And Michelle Lawson, Director at Lawson Financial, said: “This is a great innovative market offering but whilst a number of lenders offer this, very few have an impressive product.
“Parental age can usually be the blocker on these type of arrangements so flexibility is needed to split the terms amongst other things.”
HOW IT WORKS
Mortgage Boost enables family or friends to join a mortgage application as a named party, but they won’t own the property or be named on the title deeds.
Their income is used to increase the amount that can be borrowed under the mortgage, and they will be jointly and severally liable from the outset, along with the buyer.
Booster(s) will be a full party to the mortgage and undergo full credit checks, and the mortgage will show on their credit report. The Booster(s) supporting the application will need to obtain Independent Legal Advice in order to ensure they understand the impact the mortgage could have on their own finances, credit history and ability to borrow.
Mortgage Boost is available to both first-time buyers and existing homeowners and can be used across all Barclays standard residential products, so applicants have access to new purchase and remortgage rates offered.
It can also be used to apply for buy-to-let mortgages. Mortgage Boost cannot be used alongside other special products or schemes, including Family Springboard, Right to Buy, First Home Fund, Help to Buy Equity or Mortgage Guarantee Scheme.
FIRST-TIME BUYERS
According to Barclays’ proprietary data, the average age of a first-time buyer in the UK rose to nearly 34 in 2024, up from just over 31 only two years earlier, as people increasingly have to delay purchasing their first home.
Barclays’ most recent Property Insights report identifies the main barriers to home ownership as high prices (40 per cent) and the cost of a deposit (37%).
It also highlights that people may be prioritising trying to save for a deposit over other major life moments, with nearly one in five (17%) saying they would delay or decide not to get married, and one in ten (9%) stating they would delay or decide not to have children in order to save more to buy a property.
Renters are particularly pessimistic about their ability to save enough to buy their first home, with three in four saying it does not feel within reach in their lifetime and nearly six in ten (57%) believing they would find it impossible to buy without financial help from a family member
IMPORTANT STEP
Sian McIntyre, Managing Director of Life Moments at Barclays, said: “Buying a first home is a hugely important step in life and one that has unfortunately become tougher for many in recent years. We know people feel like they have to make huge compromises in order to save for a large deposit, and that family may want to help but cannot afford to.
“Mortgage Boost can help answer these challenges, supporting people to buy their first home earlier and without giving up on their other dreams.”
