Barclays has announced a revamp to its Family Springboard Mortgage, removing the 5% deposit for first-time buyers.
The Family Springboard mortgage previously involved a 5% deposit from the buyer, plus a 10% contribution from a relative or guardian that was put into an account linked to the mortgage.
But now, to mark the third anniversary of the launch of the mortgage, the 5% deposit isn’t needed.
Now it only requires the contribution that’s equivalent to 10% of the house value, from the ‘helper’.
As before, the money is put into a Helpful Start account linked to the mortgage and returned after three years with interest.
The Family Springboard was introduced to stop deposit contributions from the so-called Bank of Mum and Dad being seen as 'gifts' that never have to be repaid.
Of these, 20% who accept help see the money as a ‘gift’ that doesn’t need to be paid back.
Announcing the latest changes to the account, Barclays said it was opening up the door to even more first-time buyers and effectively removing the need for them to put down a deposit when buying a home.
Raheel Ahmed, head of Barclays Mortgages, said: “We want to offer more people a way to get on the property ladder and to walk through the door of their first home earlier than they perhaps thought.
“Buying a first home is a hugely important step in everyone’s life and one that has unfortunately become tougher for many in recent years.
“When Barclays originally launched the Family Springboard mortgage in 2013 we made the decision to help both homebuyers and the family who wanted to support their children, but couldn’t just give away large sums of money.”
Alongside the removal of the 5% deposit, Barclays is raising the maximum amount people can borrow, meaning people with an income of more than £50,000 will be able to borrow 5.5 times their income, up from 4.4 times.
Teacher Martyn Beaumont, 30, was the first person to get a Family Springboard Mortgage in 2013.
His grandparents Peter and Phyllis Clark, who helped him with the mortgage, have now got their deposit back – with interest. Mr Beaumont said he wouldn’t have got on the property ladder with the mortgage.
“My girlfriend and I were in rented accommodation before and it would have meant moving back in with our parents to be able to save for a bigger deposit on a property," he said.
A report from Legal & General recently revealed that the 'Bank of Mum and Dad' will stump up more than £5bn in 2016 to help their children in 2016, providing deposits for more than 300,000 mortgages and helping in the purchase of homes worth £77bn.