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You may have seen the recent news reports that Barclays are bringing back the 100% mortgage – but in case you haven’t read the small print, it still relies on a hefty sum of money being put up as security by generous parents or grandparents.

Once again, it seems the Bank of Mum and Dad is being put under pressure to provide a lump sum to help youngsters get their foot on the property ladder. Whilst in this instance the cash is being requested for a limited time as a security measure rather than a loan, it is still dependent on family having a readily available pot that they can dip into to help out their kids.

This new ‘offer’ comes in the wake of reports that the Bank of Mum and Dad is now one of the top ten mortgage lenders in the UK, with parents, grandparents and other relatives helping finance around one in four mortgages for first-time buyers.

Some 300,000 homebuyers will rely on cash from loved ones to get a mortgage according to research from Legal & General, with contributions averaging around £17,500.

It does beg the question, however, are mortgage lenders now relying too heavily on the fact that families can help stump up cash?

This simply isn’t a solution for many who desperately want to own their own home, but aren’t in a position to save for a deposit or request the hand-out from relatives.

A combination of soaring house prices, stricter mortgage lending rules and lower average wages are meaning many have to put their dream of home ownership on hold. For some, it seems set to remain beyond their reach.

The rental figures demonstrate the impact these challenges are having on home-ownership, with a record 2.2million people in the UK still renting in their thirties in 2014, compared to 1.24million in 2007 when the credit crunch began (figures taken from the Office for National Statistics).

We’re asking, is enough being done to help people afford their own home? And is this reliance on the bank of mum and dad actually buoying up the property market artificially, keeping prices high instead of addressing the fact that more affordable housing is needed?

The government has recently revised their help-to-buy scheme which does offer some alternatives to help young families, as reported on here, but is it enough?

What will happen in decades to come as the wealthier generations diminish? Parents and grandparents at present are able to help younger family members, in many cases, because they had the benefit of buying cheap and seeing their house values skyrocket.

If the trend continues that less and less people are able to buy their own home, and house prices plateau, what does this mean for future generations?

As conveyancers, we love nothing better than seeing the joy on the faces of young families getting the keys to their first home – but we worry that we’ll soon be seeing that less and less.

We welcome your thoughts!




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