The ‘bank of mum and dad’ has been a source of borrowing power for young people looking to purchase their first home.

However, new figures show that in March, borrowers continued to rely on their loved ones to boost their borrowing power, but are increasingly exploring new ways to fund it.

According to new research from Legal & General Mortgage Club’s SmartCriteria tool, searches for homeowners looking for joint borrower sole proprietor (JBSP) mortgages climbed by 17 per cent in March, suggesting that borrowers are relying on financial support.

Often referred to as a JBSP mortgage, a joint borrower sole proprietor mortgage allows a parent (or family member) to contribute to their son or daughter’s mortgage without being a co-owner.

It gives the young homebuyer a feeling of independence and ownership. The JBSP is flexible too, so parent contributions can reduce over time until the son or daughter can cover all mortgage payments themselves.

How is a JBSP mortgage different from a joint mortgage? 

With a JBSP mortgage, the other person (typically a parent) accepts joint responsibility for making mortgage payments but has no legal claim to the property.

The research tool tracks product searches from over 8,000 advisers, highlighting the purchase and remortgage trends witnessed by brokers across the industry.

The data also shows that demand from buyers continued despite rising living costs and soaring house prices.

While parents are a welcome lifeline, couples aiming to get on the property ladder can help themselves maximise deposits by:

  • Reducing rent as much as possible. Consider something cheaper like a house or flatshare for the short term.
  • Putting away savings on payday. This will show lenders you are serious about repayments and will prevent overspending while you save.
  • Open a Lifetime ISA. As long as you’ve had your LISA for longer than a year, you should be able to cash it out as a first-time buyer.
  • Move back with family. A tough decision, but you will save money as you are likely to pay less rent and allow you to save.
  • Buy part of a property. You will need to save less for shared ownership and you will still pay rent on part of the property. But you are on your way.
  • Cut out unnecessary costs. That should be obvious!