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First-time buyers rely on parental support

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by Gill Montia
First-time buyers rely on parental support

Price comparison website, Moneysupermarket.com, has reported that over 50% of the first-time buyers that approach mortgage lenders using its site are receiving financial support from parents.

Those attempting to get a foot on the property ladder have been particularly hard hit by borrowers raising deposit requirements and according to research from Moneysupermarket, parents are providing help with initial costs, such as deposits, stamp duty and legal fees.

In some cases they are adding their names to the mortgage.

Latest figures from the Council of Mortgage Lenders show that in July, loans to first-time buyers declined to 17,300, down 5% on June and 48% on July 2007.

The average first-time buyer deposit rose from 13% in June, to 15% in July and according to Louise Cuming, head of mortgages at the website, first-time buyers are therefore increasingly reliant on family help.

However, the rise in the size of the average deposit has meant that the average first-time buyer loan-to-value ratio fell to 3.24 times income in July, down from 3.33 times income in June and reverting to the level recorded in July 2006

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News posted: September 16, 2008

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