Family Help Matters For First-Time Buyers

Tuesday, September 15, 2020

If you are a first-time buyer, or you know someone who is keen to buy their first property, the importance of help cannot be overstated. The Help To Buy scheme has been extended, and this has helped many thousands of property owners buy their first home.

There has also been significant support for first-time buyers from their loved ones. Not every family is in a position to manage this, but when it comes to owning property and taking an important step forward in life, help from loved ones can make a massive difference.

Financial assistance in buying a property doesn’t only save time, it offers a wide range of benefits. It can allow the buying couple to speed up their plans, it can help the buyer to move into a nicer home or area, and it provides confidence for the buyer and their loved ones.

There are many people who feel wary about accepting financial assistance from loved ones, and if it helps, a more formal arrangement can be set up. However, in these challenging financial times, there is no denying support from a family member is very welcome for first-time buyers.

Assistance buying a home matters in 2020

Information provided by Legal & General suggests the importance of the “Bank of Mum and Dad” is set to rise this year.

In 2019, one in five property deals were concluded with support from family members or loved ones, but this year, the figure is close to one in four. The 2019 figure for property deals supported by loved ones amounts to 19% of the market, and in 2020, it is 23%.

The Legal & General information states the Bank of Mum and Dad will assist in 175,000 property deals this year. The average financial assistance is £20,000 per transaction, and there will be a collective value of £50.3bn in these deals in 2020.

Lending will fall in 2020

The same study expected the total amount of lending this year to fall from £6.3 billion in 2019 to £3.5 billion this year. The mortgage industry was significantly affected by the COVID-19 pandemic. Mortgage holidays dominated the market for a number of months, and were a pressing priority for homeowners and lenders. This, alongside a depleted workforce, led to many lenders reducing the number of mortgage products they offered.

Nigel Wilson is the Chief Executive of Legal & General, and he said; “Generous parents, grandparents, family members and friends are gifting thousands towards deposits, with the ‘bank of mum and dad’ outpacing even stamp duty cuts as a driver of renewed housing market activity.”

Whatever your circumstances are, or what move you would like to make next; we are here for you. Stones Residential prides itself on offering the best standard of service to our clients, and we work hard to help you achieve your property goals. If you would like to arrange an appointment or get more details on how we can help you sell your property, contact us today online or by calling us on 020 8954 0045.