Research from The Mortgage Lender shows that more young homebuyers are getting help from their parents and grandparents.
Key Points:
- Bank of Mum and Dad: This term doesn’t refer to an actual bank. Instead, it’s a fun way to talk about parents or family members helping out with property costs. A recent study shows that about 11% of homeowners got financial aid from their families.
- Other Ways People Get Help:
- Help to Buy ISA: A savings account that gives first-time buyers a government bonus. For example, if you save £200, the government might add an extra £50.
- LISA (Lifetime ISA): Another type of savings account for young people, which can be used for buying your first home or retirement.
- Guarantor Mortgage: This is when someone (often a parent) promises to cover your mortgage if you can’t pay. It’s like them saying, “I trust this person to pay, but if they can’t, I will.”
- Rent to Buy Scheme: A way for renters to eventually own the property they’re in.
- Shared Ownership: You buy a part of a property (say 50%) and rent the rest, with an option to buy more over time.
- Government Support: Many feel the government hasn’t offered enough support for new homeowners in the past. In numbers, 42% of the people surveyed thought this way.
- Rising Rents: Rent prices are going up in many places across the UK. This puts people in a tricky spot where they’re spending a lot on rent, which makes saving to buy a house even harder.
- Confusion about Schemes: There are lots of government schemes to help first-time buyers. However, 26% of people surveyed felt overwhelmed trying to figure out which one was best for them.
- Expert Advice: Chris Kirby, an expert from The Mortgage Lender, says that people wanting to buy a home should:
- Research: Understand all the options and schemes available.
- Talk to a Mortgage Broker: They can give advice on what financial help you can get and how to borrow money in the best way for your situation.
- “Those looking to get onto the housing ladder should take time to research what options are available to them, whilst also seeking the advice and guidance of a mortgage broker, who will be able to help clarify what support there may be, but also how best to achieve the level of borrowing they’re looking for sooner rather than later depending on their situation.”