St James’s Place has teamed up with Metro Bank to launch an intergenerational mortgage range, specifically for parents and grandparents who wish to support their children or grandchildren in buying a first home.
Exclusive to the wealth manager’s clients, the new range is the first of several exclusive banking solutions set to be developed with Metro Bank during 2016.
The advised-only product comes at a 95 per cent loan-to-value, available from 1.99 per cent. Conveyancer’s fees apply, while valuation fees are on a sliding scale from £200 on a £200,000 property, up to £1,250 on a property worth £1.25m.
The minimum deposit for the Secured Deposit Account is 10 per cent of the property value.
There is no maximum mortgage applicant age, up to four joint applicants are accepted and the property must be in England or Wales.
| Three options within the range: | |
| 1. Gifting | Designed for families that wish to gift money to their relative thereby increasing their deposit. |
| 2. Providing extra mortgage security | Families can apply for a Secured Deposit Account, which lets them to avoid gifting wealth but still adds security to their relative’s mortgage. |
| 3. Joint application | The option of jointly applying for a mortgage is available within the range. A differentiating factor of Metro Bank is that it does not require the parents or grandparents, as joint applicants, to be registered on the property deeds. This is critical to avoid exposure to stamp duty and other tax implications normally associated with purchasing a second property. |
A statement from St. James’s Place said a primary benefit of the range is it allowed clients to plan for their own future, while supporting their relatives to get onto the property ladder.
Chief executive David Bellamy said: “As the UK demographics change, wealth is increasingly being transferred between generations during lifetimes. At St. James’s Place we have certainly seen many of our clients wishing to provide substantial financial support to their adult relatives today.
“In an increasingly complex world, the need for reliable and expert advice has never been more obvious. 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’s chief executive Craig Donaldson added: “Accessibility to the property market is a major challenge for young people and we understand their family’s desire to support them. We look forward to continuing to innovate alongside St. James’s Place over the coming years.”
peter.walker@ft.com
