Newspaper article The Journal (Newcastle, England)

More First-Timers 'Turning to Grandparents for Help to Buy'

Newspaper article The Journal (Newcastle, England)

More First-Timers 'Turning to Grandparents for Help to Buy'

Article excerpt

Byline: Anne Southby

AN INCREASING number of young buyers are banking on their grandparents to help them to take their first steps on to the property ladder.

More than 15% of first-time buyers are expecting to receive a gift from their grandparents to help them to buy their first home, according to research from the conveyancing team at law firm Simpson Millar.

The proportion expecting to need either a gift or a loan from grandparents has risen to one in six (17%). The Bank of Mum and Dad has traditionally tended to be the source of financial gifts or loans for house purchases, and still accounts for the lion's share of gifts or loans, with one or both required in 43% of purchases.

But grandparents are increasingly being tapped for help with deposits, whether they are simply helping out their grandchildren or using gifts as a way of mitigating inheritance tax.

House buying is increasingly a multi-generational affair, with one in seven prospective first-time buyers (14.5%) now saying they'll need contributions from mum and dad and grandparents too.

Fran Mulhall, regional operations manager at North East property specialists GFW Letting, said: "It's always been pretty common that parents can lend or gift deposits to their children, being clear at the beginning whether they expect the money to be repaid and under what circumstances is key if it is a loan.

"But, in recent times, as getting on the property ladder becomes increasingly difficult for first-time buyers, grandparents are also starting to help out or use some of their life savings to help their grandchildren buy a house. Buying a house is a big commitment but a lifelong investment, echoed by the rise in grandparents across the region choosing to spend part of their pension or savings to enable their grandchildren to become homeowners."

However, while the benevolence of family members is welcome and essential for many, Simpson Millar is warning older relatives to ensure their generous contributions to the "forever home" doesn't end up being put at risk in the many cases when relationships break down. …

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