Mum and dad boosting FTB affordability
1st Oct 2012
The number of first-time buyers in the UK property market who are turning toward the bank of mum and dad as a way to fund the purchase of their first home is increasing, according to a newly released report.
HSBC has said that in the three years between 2008 and 2011, parents of those who are looking to purchase a house have added £23 billion into the property market through simply trying to help their children buy a home.
This means that some 100,000 first timers who may have otherwise not been able to buy have been able to afford a mortgage.
Typically, first timers who are looking to get a mortgage have found that they need a deposit amounting to 20 to 25 per cent of the value of their house to secure a mortgage, meaning that many have turned to the savings stored away by their mother and father.
Peter Dockar, head of mortgages at HSBC, said that 18.7 per cent of first time transactions in this period would have not have taken place without this help.
"It is obvious that the ‘bank of mum and dad' has stepped in to plug the gap left by those banks and building societies who have constricted their lending in recent years, which means that family support has become an important element of the post-crisis financing mix."
Posted by Staff Writer: Frances McDonald
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