First-time Buyer
Buyers still rely on Bank of Mum and Dad
One in every 20 homebuyers are forced to rely on the ‘Bank of Mum and Dad’ to support their housing aspirations.
The number of buyers who rely on parental help and gifted deposits has remained high as house prices continue to rise.
In the last year more than 64,000 property sales were made by buyers who had been gifted part or all of their deposit, according to conveyancers My Home Move.
The firm said that rising house prices had left many, especially first-time buyers, reliant on outside help.
However, borrowers have been warned that they must alert their mortgage lender if this is the case as gifted deposits can have some legal implications.
Anti-money laundering checks will need to be conducted and evidence of where the money has come from will need to be provided.
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Doug Crawford, CEO at My Home Move, said: “Buying a house can be one of the most stressful experiences people go through and times are certainly getting tougher for those trying to get onto the housing ladder, with house prices continuing to rise across the country and lending criteria becoming more stringent.
“For the growing number of first-time buyers looking to the bank of mum and dad or bank of gran and grandad to help secure their deposit, having the right paperwork in place at the outset is crucial to avoid added delays in the process.
He added: “Those gifting the deposit will also have to undergo several checks to ensure no money laundering is taking place, so it’s important that they know what is required. Mortgage lenders will often require a letter of consent from the person gifting the deposit, along with a bank statement, so being prepared at an early stage in the conveyancing process could ensure unnecessary delays are avoided.”
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