Parents are assisting first-time buyers
Posted: 26 Apr 2006 09:31:12 GMT
As house prices continue to rise in the UK, more and more first-time buyers are turning to their parents for assistance in getting a foot on the property ladder.
The financial support of a parent can allow a first-time buyer to acquire the kind of property that would otherwise be out of reach and new research suggests this has become a popular strategy.
Linden Homes has reported that the mortgage deed contains the names of both the parent and the son or daughter, while the lender makes a decision about how much to lend based on the combined income of all applicants.
Philip Davies, chief executive of Linden Homes, said: "Buying jointly with parents is becoming increasingly popular as children struggle more and more to fund their own first home purchases.
"Gifted deposits have been a common solution in the past, but as property prices rise even further out of reach of starting salaries, bridging the affordability gap becomes a bigger problem, especially in London and the south-east."
Parents often decide that a joint purchase is more desirable than a gifted deposit, largely because they can have more control over the property choice and they can treat it as an investment project.
In addition to relying on the financial support of parents, young first-time buyers also have the option of buying a property privately online, to eliminate some of the costs that typically mount up when using an estate agent.