St James’s Place and Metro Bank are teaming up to launch an ‘intergenerational’ mortgage range.
The range lets parents and grandparents support their children or grandchildren buy their first home and is only available to SJP clients.
The range has three options:
- Gifting, where families give money to a relative and increase their deposit
- Providing extra mortgage security, where families can apply for a secured deposit account which lets them add security to a relative’s mortgage without giving them cash
- Joint application, where more than one person can apply for a mortgage. Metro Bank does not require the parents or grandparents to be registered on the property deeds, meaning they avoid stamp duty charges for second properties
SJP says there is a “marked and growing” problem with generational wealth in the UK.
SJP chief executive David Bellamy says: “We believe there is an opportunity for families to support each other and help with the intergenerational wealth divide.
“We now live in a world where it’s possible for four generations to exist within a family. As the UK demographics change, wealth is increasingly being transferred between generations during lifetimes. We have certainly seen many of our clients wishing to provide substantial financial support to their adult relatives today.
“While it is great to see families offering such support, they also need to be secure in their own future. The intergenerational mortgage range allows families to contribute to their children’s home-owning ambitions but also enables them to be secure in their own future and plan for the longer term.”
Metro Bank chief executive Craig Donaldson says: “Accessibility to the property market is a major challenge for young people and we understand their family’s desire to support them.
“We are delighted to be offering this innovative new range of mortgages, while enabling more young people to get onto and progress up the property ladder.”