Has the Bank of Mum & Dad Helped You Onto the Property Ladder?

The increasingly renowned Bank of Mum and Dad are expected to lend a helping hand to 25% of UK property transactions this year. In numerical terms this means that our parents are expected to fork out a combined total of over £5 billion, contributing to over 300,000 mortgages.

 

Each set of parents are anticipated to donate on average £17,500 or 7% of the typical purchase price in order to help their offspring onto the progressively hard to climb property ladder.

 

So why are we continuously having to depend on our parents to help us get a foot on the bottom rung of the property ladder? Since recuperating from the financial crisis, the property market prices have been spiralling uphill at a lot quicker pace than salaries, which has therefore made home ownership a much tougher achievement.

 

Property has become a lot tougher for first time buyers to secure by themselves. Buyers are further hindered by the fact that mortgage lenders are being forced to request larger deposits.

 

The combined sum of hand-outs towards deposits will reportedly make the Bank of Mum and Dad the UK’s 9th biggest mortgage lender this year, so will this not have a knock on effect on the parents finances and put their own monetary stability at risk? Statistics have shown that in London, parental contributions have already made up more than 50% of the wealth of the average household in the capital.

 

Accounts have indicated that some parents are deciding to even downsize their property in order to free up some additional funds for their children to put towards their deposit. Other parents have revealed that the money used to get their son or daughter onto the property ladder would have been given to them later in life as part of their inheritance anyhow, so to use it early makes little difference.

 

Of course not everybody has financially comfortable parents that are willing to help them secure their first property. A larger 75% of the population may be in a position in which they are still seeking a method of finding their ever elusive deposit.

 

 

Josh Cousens – abbotFox

 

 

You May Also Enjoy

Estate Agent Talk

Closing the gap on client relationships and recommendations

New research from iamproperty has highlighted the growing disconnect between what buyers and sellers want from their agent and what they experience, which could be killing recommendations from happy clients. iamproperty’s quarterly consumer survey revealed that only a third of respondents (32%)¹ would recommend their agent following their experience. With many agents relying on recommendations…
Read More
Estate Agent Talk

Northern Ireland to expect over 25,000 new home movers

Belfast-based estate agency John Minnis has revealed that Northern Ireland is to welcome an estimated 25,000- 30,000 new arrivals from the UK and Europe over the next five years, as migration to the region reaches its highest levels in more than a decade. Recent figures show that 11,700 people relocated from other parts of the…
Read More
Breaking News

Red tape and rising costs stifling new-build availability across the capital

The latest analysis from London estate agent, Benham and Reeves, has revealed how protracted building timelines are preventing the capital’s housebuilders from delivering the level of new-build housing stock required to meet demand, with new homes currently accounting for just 7.5% of all properties listed for sale across London. Benham and Reeves analysed the latest…
Read More
Estate Agent Talk

UK’s new wave of ‘second cities’ offers strongest yield growth for property investors

The latest research from West One Loans has found that whilst investors may continue to favour the nation’s key cities such as London, Birmingham, and Manchester, a new wave of ‘second cities’ is delivering the strongest growth in rental yields. These emerging markets are offering investors the chance to achieve attractive returns, driven by rising…
Read More
Estate Agent Talk

Decline in change of use further constricting housing supply

Jonathan Samuels, CEO of Octane Capital, believes that a decline in conversion projects could ultimately prevent the Government from hitting its ambitious housing delivery targets, as the firm’s latest analysis has revealed that the number of homes created through change of use has fallen sharply in the last five years. Octane Capital analysed official Government…
Read More
Rightmove logo
Breaking News

Annual price fall driven by south, which could be harder hit by rumoured property taxes

The average price of property coming to the market for sale rises by 0.4% (+£1,517) this month to £370,257. However, average new seller asking prices are now 0.1% below this time last year following several months of muted price growth The dip in annual prices is driven by London and the south, as the south…
Read More