'Bank of mum and dad' now crucial for first-timers

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Couples who are able to turn to the ‘bank of mum and dad’ make up the majority of young UK first-time buyers, a case study suggests. Linden Homes said young people who can borrow money from their parents are among the few who can currently make it onto the country’s property ladder.

The firm used two people who recently moved into one of their apartments as an example, with a family loan of £30,000 proving crucial to the purchase. Having made the decision to move in together, Richard Godbold and his partner Laura, both 20, were determined to avoid the increasingly expensive rental market in their home town of Tunbridge Wells.

The £30,0000 from Laura’s parents was used as a deposit on a £182,000 one bedroom apartment at Linden Homes‘ Viva development in Tunbridge Wells town centre. Richard said:

“We have been living with Laura’s parents and were eager to get on the property ladder as opposed to renting when we decided to move in together.

“The loan gave us the boost we needed to get off the ground, and meant we were able to access a more favourable mortgage package.”

Linden Homes South East managing director Paul Cooper, said:

“Parents offering children a helping hand to finance their deposit is a key way of getting first-time buyers onto the property ladder, particularly in the current climate.

“However, there is still a range of competitive mortgage products available, and developers are doing all they can to offer incentives.”

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