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Home loans cap at bank of mum & dad

PARENTS will have less chance to help their children on to the property ladder after the Nationwide Building Society put a limit on withdrawals from the ‘bank of mum and dad’.

Britain’s second-biggest mortgage lender is to insist buyers find 75 per cent of the deposit themselves from their own savings.

The move comes just months after the Nationwide told new mortgage customers they will now need a minimum deposit of 15 per cent.

It also follows a collapse in the number of lenders allowing deposits of ten per cent or less, amid fears house price falls could plunge millions into negative equity.

Sources told The Sunday Times first-time buyers will now have to give proof they have saved money themselves, to reassure Nationwide that they will be able to afford to pay their mortgage.

Estate agent Savills found 40 per cent of all mortgaged first-time home buyers received financial help from their families last year.

But the £5billion offered was almost £1billion lower than two years ago.

Lloyds Banking Group said the proportion of family lenders fell to 19 per cent in June — probably because the pandemic left many less well-off.

The new restrictions will be ‘unwelcome news for aspiring homebuyers’, said Chloe Timperley, the housing campaigner and author of Generation Rent.

However, she warned: ‘House prices cannot defy gravity forever.’

■ A RADICAL shake-up of the ‘outdated’ planning system will be announced this week, housing secretary Robert Jenrick has promised. He said new laws would allow quicker development on land marked ‘for renewal’ and homes, hospitals and schools would be automatically allowed in ‘growth’ areas.