Stroud & Swindon has launched a buy-to-share financing option which is available for on all its residential products.
The aim is that consumers can increase the amount they are able to borrow 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 onto the property ladder, but do not want to necessarily make a financial commitment with friends.
Consumers who use the buy-to-share option will be allowed to add £4,250 to their annual income for the first room rented, and then £2125 for the second.
Paul Chafer, sales director of Stroud & Swindon, says: “As house prices continue to rise steeply, more and more first time buyers are finding it impossible get a foot on the property ladder or are forced to purchase property with friends.
“Our new buy-to-share scheme takes into account the potential income that can be gained by letting a room and increases the amount first-time buyers can borrow, in a sensible sustainable manner.”
John Olney, head of buy-to-let lending at The Business Mortgage Company, says: “This is certainly the first that we have heard of this type of option being made available in the residential mortgage market. It is an interesting move and a welcome innovation in the market place. As first time buyers struggle to get on the property ladder, this offering will certainly assist with affordability.
“This may give home-owners a taster of the benefits of renting out property and encourage them to venture into Buy to Let as a form of investment.”