Parents as Mortgage Lenders & Return of the First Time Buyer
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The Bank of Mum and Dad
The ‘bank’ of mum and dad is one of the top ten mortgage lenders in the UK, according to research by Legal and General. On average, parents will provide £17,500 towards a deposit, and up to £24,000 to help support a first time buyer. Whether lending, gifting or
acting as a ‘helper’ or guarantor, 40.5% of prospective buyers across the South East anticipate they will need support from family and friends to purchase in the future as house prices have outpaced inflation and wage increases.
Return of the First Time Buyer
14% more loans were issued to First Time Buyers (FTBs) between April and June 2016 than a year ago, according to data recently published by the Council of Mortgage Lenders. Borrowing to FTBs reached £13.7 billion, up 21% on a year ago. With FTBs tempted back to the market after the investor rush in Q1, the average price of a FTB home (a property with two or fewer bedrooms) was £188,237 in August, a slight drop of 0.8% on July (Rightmove). On average, a FTB across the South East borrows 81% of purchase price, with a loan of around £181,000.
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