Parents' input key to helping sisters get in on the property act

THE chances of Sheryl and Stephanie Saunders getting a foothold on the property ladder had receded during the credit crunch as lenders shut up shop to borrowers without large deposits.

As a chartered surveyor, however, their father Lance was only too aware of the difficulties they faced and decided to step in. Now, the sisters, 25 and 30, are waiting for the green light to move into their Edinburgh flat after having their offer accepted.

"To help them buy a property in this market, as for many young people, it would require parents to provide a deposit or other financial assistance and my wife and I have been keen to help them get on to the property ladder for some time. They would have found it very difficult to buy in the area they wish to buy and at the resultant price," he said.

Having decided to provide financial backing, Lance went online to compare different lenders and the deals they were offering. The exercise only confirmed that the current market is a difficult one for first-time buyers without large deposits.

"Some lenders would not go beyond 80-85 per cent loan-to-value and the 90 or 95 per cent mortgages that were on offer came with high interest rates."

Lance said the flexibility of the Lloyds lend-a-hand mortgage addressed that problem by offering a competitive fixed rate of 4.79 per cent for three and a half years and up to 95 per cent loan-to-value with 25 per cent of the property value being paid as a deposit or guaranteed through a Lloyds savings account as security.

"Other deals did not seem so flexible or attractive, not many lenders are willing to offer a scheme for first time buyers with an attractive fixed rate, enabling parents to help their children with a form of guarantee," said Lance.