A NEW drive to get young Scottish homebuyers on the housing ladder by freeing up cash in their parents' and grandparents' homes will be launched in the retail market today.
The "Lifetimes" product was launched by Dunfermline building society in the intermediaries market earlier in the year, and the society says that the time is now right to extend it.
Lifetimes enable parents and grandparents to use their houses as
collateral as a way of raising funds to help provide deposits for their children.
The loan, with rolled up interest, is paid off when the elderly relatives pass away and their property is sold off.
Niall Fraser, the head of branch sales at Dunfermline building society, told The Scotsman: "Against the current market, this is a great way for parents or grandparents to help their family members get on to the housing ladder.
"It is a secure way to take cash out of assets when it is needed, for example to provide a deposit for a first home."
David Gibb, Dunfermline's national key account manager, added: "The Scottish mentality has traditionally been to get your final property and, when you pass on, to leave that to your children.
"But with many people living well into their 80s now, realistically a lot of their children are often in their 60s, so you would already have expected them to have made their way in life.
"Particularly in the current tough housing market, when it is very difficult indeed for young people trying to get on the housing ladder, surely it will make parents and grandparents feel better that they are helping their children to fulfil their housing aspirations now."
Dunfermline said it believed the Lifetime product was particularly relevant in the wake of the current bank lending crisis, when many mortgage lenders were demanding deposits of at least 20 per cent.
Gibb explained: "We believe it is an innovative way of freeing up money now for younger would-be homebuyers rather than them inheriting a property when they are a lot older."
The Lifetime mortgage is available to people aged 55 and older. The money released from the property can be taken as a lump sum or a combination of a lump sum and monthly income.
There are no restrictions on how the money released can be spent, says Dunfermline.
The full article contains 393 words and appears in The Scotsman newspaper.
