Helping relatives onto the property ladder is a significant factor in later life mortgage borrowing, with Suffolk Building Society research showing that 63% of clients borrow to provide financial support to family members.

The findings suggest this support is being provided despite widespread concern among older borrowers about protecting their own retirement plans.

Some 61% of intermediaries surveyed said clients were concerned about balancing support for children, grandchildren or other relatives with their own retirement and future financial needs.

Almost half of brokers, at 47%, identified raising money to help a family member, including through gifting, as one of the most common reasons for taking out a mortgage in later life.

A further 16% had worked with older borrowers seeking to be added to a mortgage to help a relative, including through joint borrower sole proprietor (JBSP) arrangements.

Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “Brokers have an important role to play in helping borrowers consider the wider implications and what options are available for providing financial support to adult children. It all starts with a conversation, and understanding what the family’s goals are.

“Affordability is seen as the main hurdle for first-time buyers. Helping to boost affordability by taking the income of multiple family members into account through JBSP can help people get onto the property ladder.”

She added that gifting savings or raising money against a property could provide an alternative, but said brokers could help clients consider the implications for their longer-term priorities, including their planned retirement lifestyle, financial flexibility and inheritance tax.

BROKERS DRIVE AWARENESS OF JBSP

The research also indicates that intermediaries are often responsible for introducing borrowers to JBSP mortgages rather than responding to existing demand.

Brokers suggested a JBSP mortgage in 65% of cases involving the product, while clients themselves requested one in only 9% of cases.

Grimshaw said: “Many first-time buyers have written off their chance of homeownership before they’ve spoken to anyone. But this is a mistake, and they may be making the wrong assumption.

“Understandably, the gap between house prices and earnings is seen as the biggest challenge by many. However, from JBSP mortgages to rental track record lending, the mortgage market has responded with innovative solutions designed to help with the affordability challenges.”

She said families now had more options for pooling their financial resources, while brokers had a role in explaining how the different arrangements worked.

Grimshaw added: “Our research shows that brokers are crucial in ensuring borrowers are aware of, and understand, these options.

“While intermediaries have particular importance for first-time buyers, more experienced homeowners can learn just as much, such as how JBSP mortgages can help them support loved ones, whilst avoiding extra property taxes like stamp duty surcharge or capital gains tax.”

Suffolk Building Society introduced its JBSP mortgages almost two years ago. The lender said the products have since accounted for 10% of its applications.