The lender will now accept applications from borrowers seeking additional capital for gifting purposes when remortgaging
Longer-term residential lender April Mortgages has announced an enhancement to its capital raising criteria, aimed at assisting FTBs in the UK.
The lender will now accept applications from borrowers seeking additional capital for gifting purposes when remortgaging.
According to April Mortgages, gifting has gained importance in the UK housing market, as increasing house prices and rising household bills have made it more difficult for prospective buyers to save sufficient deposits.
It said that many FTBs now rely on financial support from family members, a trend supported by research from Legal & General, which found that more than 314,000 house purchases in 2023 were aided by the Bank of Mum and Dad, with gifts averaging over £25,000.
Under the new criteria, borrowers can borrow up to 4.5 times their income for gifting purposes.
The move follows April Mortgages’ recent decision to raise its maximum loan-to-income (LTI) caps to up to six times income for FTBs, aiming to make their products more accessible to a wider range of borrowers, especially those entering the property market for the first time.
April Mortgages offers fixed-rate mortgages ranging from five to 15 years, with options available up to 95% LTV. As borrowers lower their LTV — either through repayments or house price appreciation — their interest rate drops, providing added financial stability.
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, said James Pagan, director of product and portfolio management at April Mortgages. 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.