Restrictions on mortgages for residential property have increased with the news that Halifax, the UK's biggest home lender, is ending its guarantor scheme whereby parents could help their children onto the housing ladder.
Conveyancing solicitors, who handle legal aspects of such schemes, are concerned this will restrict the options for young people who are unable to afford a mortgage on their own.
The taxpayer-backed bank is now requiring that parents who wish to support their offspring put 20% of the purchase price of the property into a bank account at Lloyds TSB under its new Lend a Hand scheme.
Halifax is also increasingly encouraging parents to be listed on the title deeds, which has the potential to give them a problem with capital gains tax.
Northern Rock is one of the few building societies continuing to offer parental guarantor mortgages, which usually use a multiplier of the parents' income as a measure of affordability when buying a residential property rather than that of the adult children who will live there.
