Orbit Homes ‘Help and Reward’ the bank of Mum and Dad
Published by Kristen Boho for Orbit Homes in Housing and also in Environment
A recent study from Rightmove has suggested that the single biggest concern for would-be first time buyers is saving a large enough deposit to buy a home of their own and that an increasing proportion of buyers are reliant on parental help when it comes to raising the substantial deposit now needed to obtain a competitive mortgage offer.
Orbit Homes has recently launched a new scheme to support and reward those parents who want to help their children onto the property ladder.
The ‘Help and Reward’ scheme allows parents or other family members to gift a deposit, up to a maximum of 20% of the value of the home being purchased, and earn the equivalent of 5% simple interest over 5 years – a return that’s unlikely to be beaten by the banks!
For example, if a buyer were to purchase a home for £120,000 with a 20% Help and Reward deposit of £24,000 from a family member, they would earn a huge £6,000 return. What’s more, the family member doesn’t have to wait five years to see a return on their money; payment will be made upon legal completion of the home.
Chris Craig, Sales Director at Orbit Homes said: "In the current climate many young buyers struggle to save a substantial deposit and need financial help to get onto the property ladder, more often than not this comes from the ‘bank of mum and dad.
"The Help and Reward scheme is designed for those parents who want to help their children and has the added benefit of giving them something back in return. Furthermore, the scheme isn’t just open to parents, other family members or even family friends could contribute too!"
Mark Singleton, Independent Financial Advisor at APH Financial Management commented: "Would-be first time buyers face a struggle to buy a home due to the reduced availability of low deposit mortgages and typically those with a higher deposit tend to get the best mortgage deals.
"Often, parents who gift their children the deposit on their first home lose out on the interest they would have earned whilst their money was in a savings account. With the base rate currently at such a low level the 5% return on offer makes the Help and Reward scheme an attractive prospect"
Help and Reward is available now on selected homes and developments. For more information please visit www.orbithomes.org.uk or call 02476 437 040