Introduction
We helped a first-time buyer secure a Joint Borrower Sole Proprietor (JBSP) mortgage to purchase a property in Frimley, Surrey, with financial support from a parent.
The application had already encountered difficulties with high street lenders because the supporting parent owned another property in the same building. This raised concerns under lenders’ property concentration rules, despite the first-time buyer intending to own the new property independently.
After researching specialist lenders and reviewing the affordability requirements, we arranged a £160,000 mortgage with Kent Reliance on a five-year fixed rate. The arrangement allowed our customer to proceed with the purchase in their sole name while using their parent’s income to support the mortgage application.
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The Scenario
Our customer was purchasing their first property in Frimley and needed additional borrowing support from a parent to meet the mortgage affordability requirements.
The proposed arrangement was a Joint Borrower Sole Proprietor mortgage, commonly known as a JBSP mortgage.
Under this structure, both applicants are responsible for the mortgage, but only the first-time buyer is named as the legal owner of the property.
This allowed our customer to purchase the property in their sole name while including the parent’s income in the lender’s affordability assessment.
Both applicants were employed, and the supporting parent also owned other residential and investment properties.
The mortgage required was approximately £160,000 on a capital repayment basis, with a term of 21 years.
Although the customers had a good credit history, the application was complicated by the supporting parent’s existing property ownership and the amount they needed to borrow.
The Challenge
The main difficulty was finding a lender able to accommodate the JBSP arrangement alongside the supporting parent’s existing property interests.
There were also affordability considerations that affected the mortgage products available.
Existing Property Ownership in the Same Building
The supporting parent already owned another flat in the building where our customer wanted to purchase.
This created difficulties with several high street lenders, whose property concentration criteria restricted their willingness to consider the application.
Some lenders limit the number of properties connected to one borrower or related borrowers within the same development or building.
These restrictions are intended to manage the lender’s exposure to individual buildings and can affect eligibility even where the applicants have a good credit history.
In this case, the ownership arrangement had resulted in lender declines, creating uncertainty around whether the purchase could proceed.
Joint Borrower Sole Proprietor Requirements
The mortgage also needed to be arranged on a JBSP basis.
Not all lenders offer these arrangements, and those that do may have different requirements concerning supporting borrowers, existing property ownership and affordability.
The parent needed to be included on the mortgage without becoming an owner of the property.
This meant we needed to identify a lender whose criteria accommodated the ownership structure as well as the supporting parent’s existing mortgage commitments.
Meeting the Required Mortgage Affordability
A further challenge was securing the full borrowing amount.
Some of the two-year fixed-rate products considered did not provide sufficient borrowing under their affordability assessments.
We therefore needed to consider alternative product structures that could accommodate the required loan amount without compromising the customers’ ownership requirements.
The mortgage term was another consideration because the supporting parent’s age needed to be assessed against the lender’s maximum age and income criteria.
What We Did
Investigated the Previous Lender Difficulties
We reviewed the circumstances surrounding the earlier lender declines to understand why the applications had encountered problems.
The key issue was the concentration of property ownership within the same building, combined with the requirement for a JBSP mortgage.
We also considered the supporting parent’s existing mortgage commitments and how these would affect affordability.
This helped us focus our research on lenders able to assess the complete circumstances rather than simply looking for lenders offering JBSP mortgages.
Researched Specialist Mortgage Lenders
We searched the market for lenders whose criteria could accommodate both the JBSP arrangement and the existing property ownership.
Our research identified Kent Reliance as a potential option.
We contacted a lender business development manager and discussed the circumstances with the lender before proceeding.
This allowed us to investigate whether the property ownership arrangements could be considered, rather than submitting another application to a lender whose criteria might prevent it from progressing.
Reviewed the Mortgage Product and Affordability
We also assessed the borrowing available under different mortgage product structures.
The two-year fixed-rate options considered were restricting the amount available because of the affordability calculations applied.
We identified that a five-year fixed-rate product with Kent Reliance could accommodate the required borrowing under the lender’s assessment.
This was an important part of the recommendation because the lender needed to satisfy both the specialist property criteria and the customers’ affordability requirements.
Prepared the Supporting Information
We gathered and reviewed the information required to support the application, including:
- Employment income evidence for both applicants.
- Bank statements and proof of deposit.
- Details of the supporting parent’s existing mortgage commitments.
- Relevant information concerning the existing property ownership.
We also liaised with the local estate agents to keep them informed while an alternative mortgage lender was being arranged.
The application was then progressed with Kent Reliance using the specialist JBSP structure.
The Solution
We arranged a residential mortgage with Kent Reliance on a Joint Borrower Sole Proprietor basis.
The mortgage included:
- A loan of approximately £160,000.
- A five-year fixed-rate product.
- A 21-year mortgage term.
- Capital and interest repayments.
- Both applicants included as mortgage borrowers.
- The first-time buyer as the sole legal owner of the property.
Kent Reliance was able to consider the supporting parent’s existing property ownership within the same building, alongside the JBSP arrangement.
The five-year fixed-rate product also provided sufficient borrowing under the lender’s affordability assessment, unlike the shorter fixed-rate options previously considered.
Why This Solution Worked
The recommendation required identifying a lender able to accommodate several requirements at the same time.
Kent Reliance could consider the JBSP structure, allowing the parent’s income to support affordability while keeping ownership of the property in the first-time buyer’s sole name.
The lender was also prepared to assess the existing property ownership in the building, which had caused problems with other lenders.
Finally, selecting the five-year fixed-rate product addressed the affordability restriction encountered with the two-year fixed-rate options.
These factors worked together to make the required mortgage borrowing possible.
The Result
We successfully secured the required £160,000 mortgage arrangement with Kent Reliance.
This allowed our customer to progress their first property purchase in Frimley using the Joint Borrower Sole Proprietor structure.
The first-time buyer could remain the sole legal owner of the property, while the supporting parent was included as a mortgage borrower.
By identifying a specialist lender and changing the product recommendation to meet the affordability requirements, we overcame the main issues that had prevented the application from progressing with other lenders.
What This Case Shows
A Joint Borrower Sole Proprietor mortgage can help a first-time buyer purchase a property with financial support from a family member without requiring that family member to become an owner.
However, where the supporting borrower already owns other properties, lender criteria can become more complicated.
The customer’s circumstances show that property concentration rules can affect mortgage eligibility, even where the proposed borrowing and applicants’ credit histories appear straightforward.
It also highlights the importance of considering different mortgage product structures. In this case, a five-year fixed-rate product provided a borrowing outcome that was not available under the two-year fixed-rate products considered.
Our guide to Joint Borrower Sole Proprietor mortgages explains how these arrangements work and the responsibilities involved for supporting borrowers.
Need Help with a Joint Borrower Sole Proprietor Mortgage?Surrey
If you are purchasing your first home with support from a parent or family member, Kerr & Watson can review your circumstances and explain which lenders may be suitable.
We provide independent, whole-of-market mortgage advice in Frimley and the surrounding areas, including advice for customers with more complex mortgage requirements.
Contact Kerr & Watson to discuss your mortgage options.
