Stroud & Swindon has launched a buy-to-share product that allows home buyers to borrow more by taking into account income gained by renting out a spare room.
This option is aimed at first-time buyers who are finding it hard to get on the property ladder but do not want to make a financial commitment by buying with friends.
Borrowers who take up the buyto-share option will be allowed to add 4,250 to their annual income calculation for the first room rented and 2,125 for the second.
Paul Chafer, sales director at Stroud & Swindon, says: “As house prices continue to rise, more aspiring first-time buyers are finding it impossible to get on the property ladder or are being forced to buy property with friends.
“Our buy-to-share scheme takes into account the income that could be gained by letting out rooms. This increases the amount first-time buyers can borrow in a sensible and sustainable manner.”
John Olney, head of buy-to-let lending at The Business Mortgage Company, says: “This is the first I have heard of this type of option being made available in the residential mortgage market. It is an interesting move and a welcome innovation.
“This offer will help when it comes to affordability. It might even give owners a taster of the benefits of renting out property and encourage them to consider buy-to-let as an investment.”