Bank of Mum and Dad increases its market share!
- 21st December 2017
- Buying Property News
Parents have lent a record £6.5bn to their children in 2017 to help them onto property ladder
Please see below for ludlowthompson's opening hours over the seasonal holidays: ludlowthompson stays open and accessible for our clients, recognising that this down time is often used to make future property decisions. We are only closed for the three bank holiday days over the Christmas season.
The “Bank of Mum and Dad” has been a growing force in the property market for some time now. So much so that research suggests it has now become one of the UK’s biggest mortgage lenders – coming in 9th according to recent research!
Parents lent a record £6.5bn in 2017 to help their children get onto the property ladder, and some 29% of the 650,000 first-time buyers each year now have help when buying property.
Such generosity can actually be a win-win for both sides, grown-up children get a home of their own that might otherwise be out of reach, whilst parents can put savings, which are caught in a liquidity trap and earning only nominal interest, to work for a good cause, making a sound long-term investment in the process.
With interest rates still at historic lows (despite the Bank of England’s recent quarter-point rise) eroding the value of savings over time it is an approach that makes a lot of sense.
As well as providing funds towards the purchase, parents can also help by standing as ‘guarantors’ when their children apply for a mortgage that enables them to potentially borrow more as their income or other wealth can be considered.
Stephen Ludlow, Chairman at ludlowthompson, comments: “The Bank of Mum and Dad is playing a major part in helping the next generation afford a place of their own.”
“Parents planning to help their children may want to consider doing so while the era of historically low interest rates continues. Prospective buyers who are now in a position to buy thanks to the generosity of parents may want to lock in a good mortgage deal now, as the best offers may not be around forever.
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The Bank of Mum and Dad is playing a major part in helping the next generation afford a place of their own
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