Lloyds Bank has launched a new way for families to help their children achieve their top life goal, while rewarding family members with a market-leading savings rate.

New research from Lloyds reveals that the number one life goal for people aged 18 to 35 is to buy a house (43%), but half say that saving a deposit is the biggest barrier. Meanwhile, more than two in five parents (41%) would like to help financially, but worry that they'll need the money later in life.

The new Lloyds Bank Lend a Hand mortgage removes the need for a deposit from the first-time buyer – this is provided by the savings of a family member, who can contribute up to 10% of the loan as security.

The three-year fixed mortgage at 2.99% will also provide a boost for the Bank of Mum and Dad, helping parents make the most of their savings at a three-year fixed rate of 2.5%.

Vim Maru, Group Director, Retail at Lloyds Banking Group, said: "We are committed to lending £30billion to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and Lend a Hand is one of the ways we will do this.

"At the heart of this market-leading product is helping to address the biggest challenge first-time buyers face getting on to the property ladder, while rewarding loyal customers in a low rate environment.

"Although times have changed, children still have a similar ambition to their parents – to own their own home. Lend a Hand helps parents to invest in their children's future and get the best return on their cash."

Life goals

The research shows that after buying a home, getting married (36%), and starting a family (32%) are the most popular life goals for millennials. Half (50%) say that lack of a deposit was the biggest obstacle to buying their first home, while a quarter (26%) say they have other priorities just now and another 24% say they can't afford to buy in their desired location. 

The deposit mismatch

Millennials believe they will need a £53,718 deposit to get the keys to their first home, with those in London expecting to put down £97,232. However, parents think it will only cost their children an average of £28,704 – and £37,233 in London. The actual average deposit for first-time buyers is £33,211 (and £110,182 in London). In fact, the parents' estimate is six times higher than the average deposit that they claim to have needed for their first home (£4,600).

Although parents recognise the struggle their children face to get onto the property ladder, only one in four (25%) think their child should save more. The poll reveals that 18-35 year-olds are saving on average £182.80 a month, which means it would take around 15 years to save for the average deposit at that rate, or just over half a century (52 years) to amass enough for a London pad.

The research shows that parents have average savings of £43,416 – 30% more than the average deposit needed. Those polled do want to help their children, but two in five (41%) are put off as they might need the money later and 39% think they may need it for retirement.

HOW LEND A HAND WORKS

• 100% LTV – 10% of purchase price secured with 10% savings balance held by a family member
• Three-year fixed rate example 2.99%
• Maximum term 30 years
• Maximum £500k mortgage
• £300 cashback towards family member legal fees
• As part of current Club Lloyds offer, eligible customers receive £500 cashback when they complete on
  a qualifying mortgage with us (exclusions apply)
• Savings secured for three years at 2.5%
• At least one of the borrowers or savers must be a Club Lloyds customer
• Savings account must be open before mortgage offer and funded before mortgage completion
• Savings funds may not be withdrawn during the three-year period
• Available initially in England and Wales
• Exclusions apply
• Customers or those looking for more information on how apply for a Lend a Hand mortgage
  can call us on 0345 122 1607

LLOYDS BANK TOP TIPS FOR FIRST-TIME BUYERS

1. Ask an expert – go and talk to a mortgage lender: a bank, a broker or building society to check how
much you can borrow. Once you have a clearer idea, you will be in a better position to plan ahead and
consider what you can afford.

2. Plan ahead – think about how much you need for your monthly bills. Budgeting tools and calculators can
help you get an idea of how much you will need.

3. Check your credit score – this can change over time, so don't panic if you've had issues in the past.
To buy a property with a mortgage, you need to have a reasonable credit score. To check your score will
cost about the same as a takeaway coffee.

For more information check the expert section of our website.

-Ends-

Notes to editors
Opinium research surveyed 2,010 UK adults on behalf of Lloyds Bank (including 729 people aged 18-35 and 638 people
with children aged 18-35).

Full report available here: https://www.lloydsbankinggroup.com/globalassets/media/press-releases/2014/press-release-lloyds-bank_lend-a-hand_190128.pdf