"By expanding our capital raising criteria we are making it easier for loved ones to gift deposits while also benefiting from the vital peace of mind our products provide."
- James Pagan, director of product and portfolio management at April Mortgages
Longer term lender, April Mortgages, is providing a "significant boost" to prospective first-time buyers by improving its capital raising criteria.
The changes mean that April Mortgages will support applications from borrowers looking to raise additional capital for gifting purposes when remortgaging.
Gifting has become increasingly significant within the UK mortgage market. Saving a sufficient deposit is more challenging as a result of house price growth, while potential buyers have seen their budgets come under pressure from rising household bills. As a result substantial numbers of aspiring buyers now rely on financial support from loved ones to supplement their existing deposit saving.
According to research from Legal & General, more than 314,000 house purchases in 2023 were supported by the ‘Bank of Mum and Dad’, with gifts averaging more than £25,000.
Borrowers will be able to borrow up to 4.5 times their income for gifting purposes.
The expansion of eligible reasons for capital raising follows April Mortgages’ increase of maximum loan-to-income (LTI) caps to up to six times income for first-time buyers.
April Mortgages offers a range of 5-15 year fixed rate mortgages, available up to 95% LTV. As the borrower drops into a lower LTV band, for example through the repayment of the mortgage or house price growth, their rate will reduce accordingly.
James Pagan, director of product and portfolio management at April Mortgages, commented: “Home ownership has become harder to achieve for would-be buyers in recent years, as it has become more challenging to save the required deposit. April Mortgages is passionate about supporting first-time buyers, and by expanding our capital raising criteria we are making it easier for loved ones to gift deposits while also benefiting from the vital peace of mind our products provide.
“Combined with our LTI caps increase for first-time buyers, April Mortgages is helping more borrowers to not only purchase a home but stay in it for the long term.”
