Eighth of first-time buyers plan to get joint mortgage with parents
An eighth of first-time buyers plan to get a joint mortgage with their parents to boost affordability, research has found.
A survey of 1,000 first-time buyers conducted by Teachers Building Society revealed 12 per cent of respondents had either applied or received an offer for a joint borrower sole proprietor (JBSP) product.
Some 54 per cent said they wanted financial help from their parents to buy a home, which is up from 27 per cent pre-Covid. The mutual said that this hinted at a potentially growing market for parent and child products.
In terms of how much family financial help was expected, 75 per cent said they expected around £13,000. A fifth said they would receive at least £20,000 while a further five per cent expected assistance in excess of £50,000.
Teachers BS research also revealed that 31 per cent of buyers intended to put down a deposit of more than five per cent, echoing data from the Office for National Statistics which showed the average first-time buyer put down a deposit of 20 per cent.
The survey also found a fifth of first-time buyers said the biggest hurdle to getting on the property ladder was finding a property they liked within their budget.
David Leek, head of product and marketing at Teachers Building Society, said: “In a red hot property market it is little surprise that parents who are financially able to support their children buy homes are offering their support.
“Whilst for some buyers saving for a deposit is a real challenge that a lump sum gift could help solve, for others accepting family help in the form of joining a mortgage could offer better hope of making a purchase, especially in highly priced and competitive areas.”
“JBSP mortgages are in effect a modern-day guarantor option, boosting affordability for the buyer without the implications of second home ownership for the supporting parents,” he added.