In 2020, the average house price for first-time buyers reached £232,000. This increase in house prices led to an increase in the deposit amounts.
In 2021, the average deposit amount reached £53,935 for first-time buyers. Yet, the amount was more than double in the most expensive areas of Greater London.
All of these numbers can lead us to one conclusion. It is becoming harder and harder for first-time buyers to save and afford a place they can call home.
Luckily, many schemes are available, and Deposit Boosts are one of the options that help first-time buyers.
Read on to know more about Deposit Boost.
A Small Introduction To The World Of Deposit Boosts:
With the increase in house prices, there is an increase in deposit payments.
At this moment, the idea of Deposit Boost comes as a creative solution to secure better mortgage rates.
Deposit Boost is a scheme that helps you increase the amount of your deposit with the help of different tactics.
Below, we will take a look at some of the Deposit Boost schemes that might be helpful to you.
Get You Deposit Boost With An Innovative Online Finance Platform:
Cutting with the traditional and old-school methods of financing a mortgage, many financial technology startups started to revolutionize the market.
With their fresh approach to multi-channel communication, they realized that online is where they can find the best deals.
For this reason, we are bringing you some innovative solutions to get a Deposit Boost online.
Tembo
Who Is Tembo?
Tembo are a family-focused digital mortgage broker. It’s their mission to get the next generation of buyers onto the property ladder, through their specialist family Boost mortgages.
One of the ways Tembo helps people buy their first home is through a Deposit Boost. A Deposit Boost is a way for a buyer to increase their deposit, so they can either meet affordability requirements, access better interest rates with a lower LTV, or just get a big enough downpayment to be accepted by a lender.
A Deposit Boost is a service consisting of two separate mortgages.
The first is a mortgage taken out by a family member (known as a Booster) on their property. The proceeds are then gifted to the buyer to put towards their house deposit. The second is a mortgage for the buyer’s home.
How Does Deposit Boost Work With Tembo?
As Tembo is a family-focused mortgage broker, the Deposit Boost scheme it offers relies on your family members’ support.
Assuming that one of your family members is willing to support you get on the property ladder, here are the steps for getting a Deposit Boost with Tembo:
- The story usually starts with you finding a house you can not afford and needing to gather the money for the deposit.
- Even if there is no cash on hand, the booster can gift you the necessary boost.
- Tembo will find the best formula to let your booster gift you the necessary amount. Usually, the deposit boost comes from your family member releasing the deposit amount from their owned property.
- With the deposit in hand, you will be able to find the best mortgage rates available.
Proportunity
Who Is Proportunity?
Proportunity is an innovative tech-driven mortgage lender founded in 2016 to make homeownership accessible to everyone.
Proportunity understands that getting on the property ladder is becoming a struggle, especially for young professionals who are now more indebted than ever.
The solutions that Proportunity offers will help you get the best mortgage possible and bridge the affordability gap in the market.
How Does Deposit Boost Work With Proportunity?
Proportunity refers to its Deposit Boost scheme with Proportunity Loan.
A Proportunity Loan is an equity loan aiming to boost your financing for the house and get a better mortgage in the market.
Below is a simplified 3-step structure to explain the process:
- Proportunity offers a calculator that determines how much you can borrow depending on your income and savings. Here is an illustration of the result you might receive after filling in your information.
- Their technology can show the best areas to look for a house based on your affordability.
- Proportunity helps you apply for a home finance scheme and can back up your finances by up to £150,000.
Generation Homes
Who Is Generation Home?
Generation Home is a mortgage lender founded in 2019 to make with a mission to democratise family support.
Not everybody has access to family support, and Generation Home brands itself as the bridge between family support and home ownership.
Generation Home, a family-focused mortgage lender, offers many solutions to first-time buyers, such as Deposit Boost.
How Does Deposit Boost Work With Generation Home?
With Generation Home, a deposit boost works in 3 different ways:
- Deposit Loan: Your deposit booster will give you an interest-free loan that you can pay back to them later.
- Equity Loan: Your deposit booster will invest in your new property. The value of this investment goes up or down depending on the home’s value. They can cash out at any time when it suits you both.
- Gift: Your deposit booster can gift you the deposit amount.
With these three Deposit Boost formulas, as a first-time buyer, you have the opportunity to decide with your booster how they can help you.
Then, you will sign a deposit booster agreement with Generation Home to protect both sides.
Later, you can see on your account’s dashboard how your repayment will work.
Get Your Deposit Boost Directly With A Home Builder:
While technological advances are what the new generation is looking for, the ease of search is what really matters.
For this reason, many home builders across the UK propose a deposit boost scheme to help home buyers afford a new home.
Many of them offer a similar deposit boost scheme of 5%. Below, you can find some of the schemes offered directly by house developers.
Get A Deposit Boost With Barratt Homes
Why A Deposit Boost With Barratt Homes?
Barratt Homes offers to boost your deposit by up to 5%. This gives you a chance to be in a stronger position while negotiating with a mortgage lender.
With an extra 5% in deposit, totalling 15% of the total value of the new property, you have better chances of getting better interest rates on your mortgage.
To be eligible for this scheme:
- You need to find a new property which supports this plan.
- You need to contribute at least a 10% deposit.
- It is not available for Buy To Let property purchases.
Below, you can see how Barratt Homes’s Deposit Boost works.
How Does A Deposit Boost Work With Barratt Homes?
Here is a brief explanation of how it works:
- Find a home: You need to look for a new home provided by Barratt Homes.
- Get in touch with a Sales Advisor: It is the Sales advisor who will help you understand if you can take advantage of a Deposit Boost.
- Get in touch with a Mortgage Advisor: The Sales advisor can put you in touch with a mortgage advisor to know if you are eligible for a mortgage.
- Get the deposit boost: Once you meet the criteria set by the sales advisor and the mortgage advisor, you will get a 5% deposit boost.
Accelerate Your Home Ownership With Dolphin Living:
Why A Deposit Boost With Dolphin Living?
Referred to as the Westminster Home Ownership Accelerator (WHOA), it helps working Londoners on lower incomes (primarily key workers who Dolphin define as those who keep the city running – including chefs, cleaners, tube drivers etc) become homeowners.
The WHOA programme will run for 15 years and will help some 250 people into home-ownership
To be eligible for this scheme:
- You need to put down a deposit of £22,000.
- Be a renter at Dolphin Living
Below, you can see how WHOA works.
How Does Deposit Boost Work With Dolphin Living?
Here is a brief explanation of how it works. The £22,000 deposit will accrue interest over time at the same rate as average house prices in Westminster.
At the end of the programme, together with the money saved from paying 65% market rent for their Dolphin Living flat, tenant savings are expected to grow to between £44,000 and £77,000, enough to pay the deposit for their first home.
Boost Your Deposit With Bellway’s Deposit Unlock:
Why A Deposit Unlock?
Deposit Unlock is another way of boosting your deposit. Instead of adding money to your savings, Bellway offers to provide you with a mortgage with a deposit as low as 5% of the total property value.
Another advantage of Deposit Unlock is that you can combine it with other schemes offered by Bellway Homes.
This is a nice way to find the best home deals that you can afford.
So, how to use Deposit Unlock?
How Does Deposit Unlock Work With Bellway?
Even though it does not differ from other deposit boost schemes, this is how Deposit Unlock works:
- Find a home: As a first step, you need to look for a new home provided by Bellway Homes.
- Check if you are eligible: Second, you will need to speak to a New Build Mortgage Advisor to check your eligibility.
- Get your deposit unlock: Once you meet the criteria set by the specialist, you can get your deposit unlock and get your new home.
Get A £5,000 Deposit Boost With St.Modwen Homes:
Why A Deposit Boost With St.Modewn Homes:
Saving for a deposit is becoming more difficult every year. Sometimes, you find yourself missing a few thousand pounds to reach the minimum deposit of 20%.
St.Modewn Homes understood that the majority of home buyers are usually missing a small amount of money, up to £5,000 to complete the deposit.
For this reason, the home builder gifts a sum of £5,000 to support the home buyers in completing their deposit.
To be eligible for this scheme, you need to :
- Be a first-home buyer or an existing homeowner.
- Use it on the selected properties.
- Use the property as the main residence and not for investment purposes.
So, how to get a £5,000 deposit boost?
How Does Deposit Boost Work With St.Modewn Homes?
St.Modewn Homes Deposit Boost works in 3 simple steps:
- Determine your budget: This way, you can know what the range of properties you can afford is.
- Start your search: Of course, you need to see which properties support this Deposit Boost plan.
- Speak with an advisor: The advisor will let you know if you are eligible for the boost.
What’s Next?
Deposit Boosts are a great way to bridge the gap between the soaring property prices and the limited budget.
With the deposit plans above, first-time buyers have a variety of options that they can use to get on the property ladder.
Now is the time to start looking for your new home, and where else to look for the best new home deals other than Getting On The Ladder!
