Parents' debt management skills crucial to helping first-time buyers
Parents' debt management skills crucial to helping first-time buyers
Thursday 6th August 2009
While house prices across the UK have fallen over the past year, lenders are reluctant to expose themselves to bad debt and often ask for deposits of 25 per cent of a property's value or more.
This could mean that many parents are likely to turn to debt management advice in order to free up the necessary funds for their children's first home purchases.
According to recently-published figures from Credit Action, the typical first-time buyer deposit for a home now stands at around £35,000, with the average loan for a first-time buyer now just over £101,000.
And, while the figures also show that the average cost of a first home fell by around 16 per cent over the past year, those would-be buyers whose parents are able to lend them a deposit - often through turning to debt advice themselves - will be at an advantage in the market for the time being.
Helen Adams, managing director of FirstRungNow.com, said: "I don't know if [house prices] will fall any further but those people who do get onto the property ladder will invariably be those who have help from their parents, either in the form of a guarantor, a joint mortgage or a deposit."
Earlier this month, the Council of Mortgage Lenders (CML) reported that the average age of a first-time buyer in the UK has risen from 33 to 37 over the past two years, largely as a result of higher deposits.
News article brought to you by Debt1 – UK debt management specialists.
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