A Leicestershire mortgage firm says that it has experienced a sharp increase in interest from would-be buyers prepared to ask their family to help them get onto the property ladder.
Mortgage Experts Online, which is based in Station Road, Castle Donington, says that there has been a spike in inquiries from buyers who are turning to the so-called bank of mum and dad for funds, as well as approaching other relatives such as aunts and uncles.
The company says the rise is due in large part to UK lenders’ decisions to withdraw mortgages requiring just a five or 10% deposit and demand 15% and 20% contributions instead, due to high demand and the global financial uncertainty caused by the coronavirus.
Lee Griffiths, from Leicestershire firm Mortgage Experts Online, says more homebuyers are being helped out by families amid the coronavirus lockdown.
This increases the amount that first-time buyers need to save in order to get onto the property ladder, forcing many to look at other ways in which to raise the necessary money and, as a result, turning to relatives for help.
Lee Griffiths, a mortgage advisor and director at Mortgage Experts Online, says that, despite the pandemic, demand for homes has not decreased, but says that pent-up demand, cuts in stamp duty and staff shortages at banks caused by the need for remote working has put pressure on lenders.
This in turn has made things tougher for first-time-buyers, who are making full use of an ever-increasing range of products designed to enable their parents to help them, including guarantor mortgages, joint mortgages and joint borrower sole proprietor mortgages, where a child and their parent’s financial circumstances are taken into account by the lender.
There is also the option to use a lifetime mortgage, where parents borrow money against the value of their own home and then use the funds to give their child a helping hand.
Lee said: “While interest levels from people looking to buy a new home haven’t dipped during the pandemic, affordability and availability of products has certainly been affected.
“The calls and inquiries that we have received over the past few months have certainly reflected that, because we get many more customers asking us for advice on how their parents or family might help them.
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“Clearly, there are many more multi-generational conversations about money these days and maybe it’s because living under lockdown has brought families together, or made everyone realise that it’s time their child found a place of their own.
“In the current climate that’s difficult, which is why, I think, more parents and family members are willing to make a contribution to help get their child onto the housing ladder.”
Mortgage Experts Online helps buyers all over the UK to find the right mortgage advice and specialises in helping self-employed people, people on reduced-hours or zero-hours contracts, or buyers with poor credit histories.
Its accredited brokers scour the whole market for mortgages, and also specialises in buy-to-let mortgages and commercial finance.
For more information visit www.mortgageexpertsonline.co.uk
