Llloyds Bank will allow first-time buyers to avoid saving for a deposit by allowing parent’s savings to be used in its place.
The Lend a Hand mortgage, which is 100 per cent loan-to-value, launched today removes the need for a deposit which is instead provided using the savings of the buyer's family member who can contribute up to 10 per cent of the loan as security.
First-time buyers will be eligible for the 2.99 per cent mortgage rate while the family member will receive a three year fixed savings rate of 2.5 per cent.
Research by Lloyds shows that the top goal for 18 to 35-year-olds is to buy a house, with 43 per cent of millennials saying getting on the housing ladder is their target. However, half of those surveyed said that saving for a deposit is the biggest barrier.
A total of 41 per cent of parents said they would like to help financially but are concerned that they will need the money in later life.
Lloyds Banking Group retail group director Vim Maru said: “At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder, while rewarding loyal customers in a low rate environment.
“Although times have changed, children still have a similar ambition to their parents – to own their own home.”