Hitachi to make £50,000 loans to local parents for Barratt home deposit

12th January 2011

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Parents looking to put down a deposit to help their children buy a new home from Barratt Mercia will now be able to apply for an unsecured personal loan of up to £50,000 from Hitachi Capital (UK) PLC, it was announced today.

The tie-up means that for the first time parents can borrow the money to help their children onto the property ladder without either having to re-mortgage or put a second charge on their own homes.

The product is the only one of its kind currently on the market and is specifically designed to address current mortgage restrictions. Significant numbers of creditworthy first-time buyers are largely dependent on parental support because they do not have the 20 or 25 per cent deposit which lenders now require.

But many parents - who regard home ownership for their children as a sensible medium-term investment - are often reluctant to fund a deposit if any loan has to be secured against the principal family property.

Under the Hitachi Capital loan scheme, the typical buyer will only need to raise a deposit of five per cent. An 80 per cent mortgage is available from a number of High St lenders. And the remaining 15 per cent of the purchase price can be met through an unsecured loan from Hitachi Capital (UK) PLC to the buyer's parents or legal guardian.

Hitachi Capital (UK) PLC is offering unsecured loans of up to £50,000 for a period of 12 years at a fixed rate of 5.4 per cent. There are no early repayment charges and unlimited overpayments are allowed at any time during the agreement without penalty.

Steve Barton, Sales Manager for Barratt Mercia, said: "This product is ideal for parents who have sufficient income to service a loan but no available capital. Or people who have capital which is tied-up and which they do not want to access in the short-term."

Gerald Grimes, Managing Director of Hitachi Capital (UK) PLC, said: "This innovative Barratt loan gives parents an affordable option to support families getting on the housing ladder without dipping into hard earned savings."

Parents or former guardians who wish to assist their children with a home purchase from Barratt Mercia will be eligible for the loans. Applicants must be UK residents, homeowners and have a good credit history.

Barratt Mercia is currently selling properties at the following developments in Warwickshire:

Bluebell
Queen Elizabeth Road
Camp Hill
Nuneaton
CV10 9BS
Tel: 02476 399 520
Bluebell comprises two-, three- and four-bedroom houses priced from £114,950. The sales office is open daily from 10am to 5pm.

Icon
Lythalls Lane
Coventry
CV6 6HY
Tel: 02476 601 669
Icon features one-, two-, and three-bedroom houses priced from £79,950. Julie Skerratt, Sales Adviser is available at Bairstow Eves from 10am to 5pm Tuesday to Saturday by appointment only.

Zest
Exhall Road
Keresley End
CV7 8LP
Tel: 02476 335 831
Zest offers a selection of three- and four-bedroom houses priced from £175,000. The sales office is open daily from 10am to 5pm.

For more information, please contact the sales office. Alternatively, please call the sales hotline on 0844 811 9988 open seven days a week from 8am to 9pm or log on to www.barratthomes.co.uk