More than half of homeowners with adult children expect to help them get on the property ladder, new research has found.
Just under 60 percent of homeowning parents worry about their children’s chances of owning in the future and 54 percent expect to help with purchasing one, according to new research from the Homeowners Alliance
The study, a survey of 2,000 UK adults including 526 home owning parents that have adult children who do not own their home, found that Half (50 percent) wish they could provide more financial support than they can.
The research also found that of the 526, one in four (25 percent) feel guilty about not being able to provide more support to their children when purchasing a home.
By providing this support, the majority of parents (56 percent) expect this loaning of funds to have a direct impact on their own financial position.
Paula Higgins, Chief Executive, Homeowners Alliance, said: “While we all know that the Bank of Mum and Dad is supporting many people’s first steps onto the housing ladder, what our survey shows is the emotional and financial strain it puts on families in today’s Britain.
“Parents with adult children understand the importance of homeownership but are overwhelmingly worried, want to help more and feel guilty they can’t. Beyond the emotional burden, there is a worrying picture emerging of the impact this is having on older parents’ life.
“Our survey found that many people were worried that helping may leave them financially short. And 1 in 10 may even delay their retirement and work longer into old age in order to help their child buy a house.
“The system is just too pressurised. At one end of a lifetime we have young people giving up on the dream of homeownership unless they’re lucky enough to have access to the bank of mum and dad, while in later life, we see parents using savings and delaying their retirement to help them.
“We are calling on the government to reinstate local housing targets as a matter of urgency.”
Ben Thompson, Deputy CEO at Mortgage Advice Bureau, shares some of the other ways parents could help their children get onto the property ladder
1. Become a joint borrower, sole proprietor
Parents that might not be in a position to gift the full deposit, or even part of a one, could become a joint borrower sole proprietor. This is a mortgage where several people can be listed on the mortgage application. These people are known as ‘joint borrowers’. Of these, only one or two will own, live in, and legally own the property. These are known as the ‘sole proprietor’.
Having more applicants on the mortgage means more incomes are taken into consideration which help improve affordability and the chances of potentially buying a better property. This type of mortgage could be a benefit for first time buyers.
2. Be a guarantor
By being someone’s mortgage guarantor, you could still help them get the keys to their dream home. There are two ways a person is able to be a mortgage guarantor. They can use their savings to offset against the mortgage, or they can use their own property to offset against the mortgage.
3. Consider alternative mortgage options
For those who are struggling to save for a deposit it is best to put money into a specific savings account, which will act as security for the mortgage. Speak to a broker about the mortgage options available with family support, as they will be able to tailor advice to your individual circumstances.
