A brand new mortgage solution has emerged for aspiring homeowners struggling with affordability barriers.
Mortgage lender Gen H has introduced a "part and part" mortgage scheme enabling purchasers to secure properties with only a 5 per cent deposit, while borrowing as much as 80 per cent on an interest-only arrangement.
This product targets first-time buyers who find themselves priced out of the property market despite having stable incomes.
The scheme permits borrowers to combine traditional repayment elements with interest-only portions, creating a financing structure tailored to individual circumstances.
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Industry professionals suggest this could transform homeownership prospects for thousands currently trapped in rental accommodation.
The product promises complete ownership from the outset, distinguishing it from shared ownership schemes that involve partial purchases and ongoing rental obligations.
Prospective buyers must demonstrate a combined household income of at least £50,000 to qualify for the scheme.
The product enables purchasers to select their preferred interest-only proportion, boosting their borrowing capacity when traditional mortgages fall short.
Pete Dockar, Gen H's chief commercial officer, highlighted the product's relevance in today's market.
He said: "In a country where the average house price is eight times the average salary, to say nothing of places like London, the best mortgage products are those that can be carefully tailored to suit the needs of individual buyers."
A new mortgage option has launched to help aspiring homeowners overcome affordability hurdles
| GETTYThe flexibility allows buyers to adjust their mortgage structure according to their financial capabilities.
Rather than being locked into rigid lending criteria, the idea is that applicants can optimise their borrowing to match property prices in their desired locations.
Mr Dockar added: "Part and part mortgages do exactly that. No more renting. No need for family help. And unlike shared ownership, there's no staircasing, no frustrating administration, and no rent to be paid; just 100 per cent homeownership from day one."
Financial advisers emphasise that participants should develop strategies for eventually transitioning to full repayment mortgages.
Some feel that getting on the property ladder is increasingly becoming out of reach
| GETTYThe scheme requires careful planning, as borrowers must eventually address the capital portion of their loans once their financial situations improve.
Justin Moy, managing director at Chelmsford-based EHF Mortgages, endorsed the initiative.
He said: "With rates likely to be static for some time, this innovation is exactly the way borrowers will want to buy now, and once incomes are improved, they will be able to switch to a conventional repayment mortgage in a few years."
The mortgage market remains relatively stable, with typical two-year fixed rates averaging 4.98 per cent and five-year deals at 5.02 per cent.
Market activity has been modest this week, with lenders implementing minor adjustments rather than dramatic changes to their offerings.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, observed: "It has been a somewhat subdued week for the mortgage market, but some lenders kept their ranges fresh by re-pricing, but not by significant adjustments."
She added: "Lenders appear to be acting a bit more cautiously, which is to be expected when swap rates have been hovering close to 30-day highs. However, even if borrowers only have a small equity or deposit, there are some attractive deals hitting the market."
The wider property market reveals a divide between affordable and expensive homes.
Properties valued below £200,000 have experienced growth of 2.8 per cent, while those exceeding £500,000 show no price increases.
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London saw minimal house price growth, as high stamp duty and affordability pressures continued to weigh on the market
| PAUncertainty surrounding potential budget changes has particularly affected the luxury market.
Speculation about replacing stamp duty with a new property tax has dampened demand for high-value homes.
Regional disparities persist across England.
London, the South East, South West and Eastern regions recorded minimal growth below 0.5 per cent, hampered by elevated stamp duty charges and affordability pressures.
Southern England continues to experience price declines of 1 per cent annually.
Holiday destinations including Bournemouth, Truro, Exeter and Torquay have seen values fall, alongside central London postcodes in the WC and EC areas.