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Post Office launches mortgages in response to the needs of modern millennial buyers

Press Release   •   Apr 10, 2018 10:42 BST

  • New mortgages will help young people realise their dreams of owning their own home, without having to rely on financial help from their families
  • First start mortgage; designed to boost the borrowing power of first time buyers through the support of a sponsor
    Post Office Family Link ™ mortgage;
     mortgage; helps families to provide support for young people who are trying to save for a deposit without tying up their own savings.

Post Office has announced a range of innovative new mortgages, aimed at helping the parents of the nation’s first-time buyers to support their children without tying up their own savings.

Following in-depth research with First Time buyers and their parents, Post Office found that for young potential buyers who can’t currently get on the ladder, finding a deposit is the biggest barrier (43%)*. The average first-time buyer may require a deposit of over £50,000, as recent figures from the Office for National Statistics reveal. Homes purchased by First Time Buyers (FTBs) are likely to cost on average £210,928, with a £160,442 mortgage likely to be advanced.

As the average millennial has £3,359 in accessible savings, this often means young buyers will turn to their parents for help with a deposit**. While the majority of parents (81%) are more than happy to provide financial support if they can, there are often concerns about tying up their available savings. The financial commitment of helping a child onto the property ladder can require parents to potentially part with more than a third (35%) of their overall wealth, money that is often earmarked for other things such as their own retirement***.

Having listened to the concerns of FTBs and their families, Post Office has now launched two new mortgage products to help.

Owen Woodley, Chief Executive of Financial Services and Telecoms, Post Office comments: “Buying a property has always been a big commitment but trends in the current market and the challenges these present to buyers are all things that we know families want to tackle together. We have spent a lot of time talking to first-time buyers and their families and we know that parents want to do all they can for their children. However, four out of ten parents (41%) can’t provide direct financial support***, highlighting a need for mortgages that allow families to support each other without having to part with savings.

“In response, Post Office has launched two new mortgage products; First Start and Post Office Family Link ™, with the aim of helping more young people realise their dreams of owning their own home.”

First Start is designed to boost the borrowing power of first time buyers through the support of their families. Post Office Family Link ™ helps families to provide support for young people who are trying to save for a deposit without tying up their own savings.

  • Post Office Family Link ™

With aPost Office Family Link ™ Mortgage, FTBs will now be able to secure a mortgage without a deposit. Instead, they take out a 90% LTV mortgage from Post Office and then raise the other 10% as a mortgage secured against close relatives member’s home. Buyers make two separate repayments for the first five years – one towards the assistor’s mortgage (which is interest free) and one towards their own mortgage

The Post Office Family Link ™ Mortgage has a 90% LTV with a maximum loan size of £500,000

  • First Start Mortgage

With a First Start Mortgage, FTBs will now be able to apply for a mortgage with a close relative, the sponsor will act as a co-borrower and have the option to be on the title of the property. The two highest incomes, from applicants and/or sponsor will be taken into account when assessing the level of borrowing, potentially increasing the amount a FTB can borrow.

The First Start Mortgage has product options in the 75-95% LTV’s with a maximum loan size of £500,000.

Visit postoffice.co.uk/mortgages for more information on both products.

For any FTB looking to get #OnTheLadder with the help of their family, download the Bank of Mum & Dad Conversations Guide to discuss your options.

ENDS

* Opinium Research carried out an online survey of 1,002 recent first-time buyers (those who purchased their property in the past 24 months) aged 18+ from 02 June to 09 June 2017

**Opinium Research conducted online interviews with a nationally representative audience of 2,518 UK adults between 26th January and 7th February 2018, all national average statistics are weighted to be representative.

*** Opinium conducted a survey amongst 1,009 millennials and 1,021 of their parents between the 5 and 10 of October 2017. Opinium also looked at data from the ONS to ascertain what the deposits required by first time buyers are, what the incomes of young working couples are, and what level of financial wealth their parents have. Using findings from the consumer research we were able to calculate how much millennials in 16 of the UK’s cities are able to save towards their deposit, and to what extent they can be helped by their parents.

Notes to Editors:

For more information, please contact:

Lily Cunningham, PR & Campaigns Manager Post Office

Lily.Cunningham@postoffice.co.uk

Twitter @postofficenews

Lansons

PostOffice@lansons.com

0207 566 9702 / 0207 294 3638 / 0207 294 3643

About Post Office Money

Post Office Money, launched in January 2015, brings together all of Post Office’s multi-award winning financial products under one umbrella as it seeks to become one of the leading financial services providers by 2020. Post Office Money will be available in branch, over the phone or online.

Bank of Ireland has supported customers in the UK for many decades and is the exclusive financial services partner to the Post Office. Bank of Ireland primarily operates in the UK through its wholly owned and separately incorporated subsidiary Bank of Ireland (UK) plc, which is authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Activities related to the Post Office partnership are conducted within this entity and as such, all retail deposits up to £75,000 with the Post Office are protected under the UK’s Financial Services Compensation Scheme. At 31 December 2015, Bank of Ireland (UK) plc had a loan to deposit ratio of 89% with customer deposits of c. £21 billion utilised to fund customer lending of c. £19 billion (primarily comprising c. £15 billion of UK residential mortgages).

Winner of What Mortgage award for Best Variable Lender 2017.

About the Post Office

About Post Office: Post Office Limited has an unrivalled national network of over 11,500 branches across the UK, more than all the high street banks combined, and sits at the heart of many communities across the country.

It provides around 170 different services and products spanning financial services including savings, insurance, loans, mortgages and credit cards. Post Office also offers Government services, telephony, foreign currency, travel insurance and mail services.

99.7 of people live within three miles of their nearest Post Office outlet. For many rural communities the Post Office is the only retail outlet. Post Offices remain highly valued and trusted and are the focal point for many communities. For more information, visit www.postoffice.co.uk

About the Post Office

Post Office Limited has an unrivalled national network of over 11,600 branches across the UK, more than all the high street banks combined, and sits at the heart of many communities across the country.

It provides around 170 different services and products spanning financial services including savings, insurance, loans, mortgages and credit cards. Post Office also offers Government services, telephony, foreign currency, travel insurance and mail services.

99.7% of people live within three miles of their nearest Post Office outlet. For many rural communities the Post Office is the only retail outlet. Post Offices remain highly valued and trusted and are the focal point for many communities. For more information, visit www.postoffice.co.uk.