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Innovative mortgage range helps first-time buyers

In the competitive mortgage market, full of hurdles for first-time buyers, the Society said it was continuing to find new ways to give them options, and with more niche products in the pipeline help could be at hand for thousands more in the future.

Since its introduction in 2006, Bath Building Society’s Buy for Uni product is still the only one in the UK offering students a 100% mortgage, with their parents acting as guarantors for the loan. The groundbreaking mortgage has allowed many students to purchase a house during their time at university.

Many of the students who originally took advantage of the unique product when it launched have since completed their studies, and are finding that being on the housing ladder before graduating has put them in an advantageous position.

Bath Building Society is also offering hope to others who are also struggling to make that first step.

Launched in March, the Parental Assisted Mortgage Scheme (PAMS) is a similarly innovative product designed to help young people to buy their first property, again with their parents acting as guarantors and supplying their property as collateral security in support of the loan.

Allowing the buyer to borrow up to 90% of the value of the property, PAMS allows income from renting a room in the property to be taken into account, and does not necessarily require a guarantor for the entire loan value.

The mortgage can also be utilised by second-time buyers wishing to take their next step up the ladder.

With both Buy for Uni and PAMS, buyers are in many cases able to rent out an additional room in the property to a sharer to help cover the mortgage repayments.

Head of Lending at Bath Building Society, Malcolm Graham-Jones believes that the Society’s unique approach to lending is important in the current climate.

"Most deals for first time buyers have dried up, and lenders are typically looking for a deposit of around 25%, which makes it difficult for people to get started on the property ladder," he said.

"What we’re doing is looking for different ways to help people buy their first home, and the Buy for Uni and PAMS products are doing just that.

"Mortgage lending has changed dramatically in the past 12 months, so we need to ensure we’re changing with it, whilst ensuring we’re taking a responsible and safe approach to lending."

"Having established ourselves as a niche lender, Bath Building Society will continue to develop new products to help buyers in different circumstances, whilst also offering more traditional mortgage products."

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