Recent research issued from Legal & General and Cebr in 2020, reveal that over one in every two first-time buyers (58%) who are under 35 years of age are getting financial support in order to make their house purchase.
This is commonly referred to as the ‘Bank of Mum and Dad’ but equally first-time buyers could be getting financial support from friends or wider family members. According to the research 71% of these new homeowners would not have been able to buy their new home without financial assistance.
More first-time buyers are relying on financial support to purchase their home
‘The numbers of first-time buyers who require financial assistance from family and friends to purchase a home is at record levels. The L&G research suggests 33% of all those looking to buy their first home in the next five years require financial help. The Legal & General research shows that the Bank of Mum and Dad is lending on average £19,000 to first time buyers below the age of 35. There are many reasons why first-time buyers are relying on financial support from family and friends. Rising property prices over the last ten years has meant anyone purchasing their first home needs a larger deposit, but for many first-time buyers their average income has not kept pace with the rising house prices so purchasing their first home is always going to be relatively more expensive. Finally, we have seen a tightening in the lending criteria from many mortgage lenders, this is especially noticeable during the Covid pandemic.’
Some Mortgage lenders no longer ban gifts from the Bank of Mum and Dad
‘During the summer we saw some mortgage lenders put a ban on financial gifts for certain mortgages, which really disadvantaged some first-time buyers. It is really pleasing to see that last week Nationwide, Britain’s biggest building society got rid of its rule to stop banning gifted deposits on certain products. This u-turn will help anyone who is relying on financial assistance to get on the housing ladder. If you want more information on which mortgage lenders allow you to use gifted deposits or require general mortgage and protection advice call our mortgage advisors now on 01727 845500 for an initial consultation.’
How to get on the housing market without financial support?
Unfortunately, some first-time buyers do not have access to this financial support and will have to save up their own deposit. To get onto the housing ladder most mortgage lenders currently require a sizeable deposit of between 5-15% of the purchase price of your new home. We recommend that if you are a first-time buyer you call us on 01727 845500 for mortgage advice. We can review your income and expenditure and assess your financial circumstances so you know exactly how much you can borrow and what price of property you can afford. Remember that at Lonsdale Mortgages our mortgage brokers do not typically charge a fee for our services, as we receive commission from the provider. We offer a high-quality independent mortgage broking service and our google reviews rate us 5*.’
Lonsdale Mortgages support first-time buyers. We can save you time and money by checking out the property market on your behalf and finding you a suitable mortgage product at the best rate available. We also process your mortgage application and liaise with your solicitor, to enable you to complete on time.
As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.
Read more articles for first time buyers
Our Lonsdale Mortgage Brokers assist first time buyers secure a mortgage
Should you purchase protection cover if you have a mortgage?
Why should first time buyers take mortgage advice from a mortgage broker?
Amy Kadir, Mortgage Broker - St Albans is a popular choice for first time buyers
Top tips for first time buyers