Getting one foot on the property ladder can be challenging for first-time buyers. Prices in this sector of the property market have risen by 11% in the year to the end of November 2014. Now, the average property price for first time buyers is £202,765.
Investing in property to help loved ones own their own home can be a perfectly legitimate approach to investment planning and, with careful preparation, doesn’t necessarily mean jeopardising a financial position. The buyer should have a thorough look at their own finances and be realistic of their own requirements, not just for the short-term but also over the long-term. It is important to seek legal advice and financial guidance as appropriate.
How can families help?
There are a number of ways in which parents can help children fund their first property purchase:
Other possible routes for a parental financial contribution involve using assets such as savings or property:
A combination of rising house prices and stricter lending criteria has made it arguably harder than ever for buyers to secure their first home. It is perfectly natural for parents and other family members to want to help first-time buyers realise their dream and there is a range of ways to help them do just that. Many of the approaches suggested above require financial and legal consideration and all carry risks, which you should also consider very carefully. So if you think you can help, speak to your Private Banking and Advice Manager to discuss your objectives and what options may be available to you.
1.House prices up 11% for first-time buyers, says ONS, Kevin Peachy, BBC, 13/01/15
This article has been provided to Bank of Scotland Private Banking by external/third party contributors and contains their views as at 22 September 2015 and should not be relied upon as fact and could be proved wrong. The information and opinions may not be accurate after this date. The views expressed may not reflect the views of Bank of Scotland plc.
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