More and more parents are helping their children get on the property ladder by helping them raise the high deposits required in order to obtain a mortgage. In order to obtain a decent mortgage deal these days a deposit of at least 25 per cent is usually required.
The mortgage lenders consider first time buyers, especially those under the age of 30 as they are most likely to be become unemployed, to be a high risk. They therefore require quite large deposits in order to provide mortgage facilities at favourable rates.
An increasing number of parents look to help their children to get onto the property ladder, especially as they realise how important it is for them to do so. In addition many can’t stand to watch them leave home and move into rented accommodation only to then see them struggle to pay the ever increasing rents. To raise the money required many parents have to remortgage their home or take out some other loan secured against it. Some even use it as an opportunity to downsize and release funds that way.
Rents are increasing because there is a high demand for rental property as many people are nervous about buying a home in the current economic climate, and those who do want to buy are unable to so due to being unable to obtain a mortgage. The rising rents has seen more property investors increasing the size of their property portfolios. This has also led to an increased demand for buy to let mortgages, as property investors both old and new require finance for their purchases.
There has also been a rise in let to buy mortgages as many people have been put off selling their homes when looking to move property due to their drop in value. As an alternative people are looking to rent their property when moving rather than selling. Many then have the intention of selling the property later when property prices improve. A let to buy mortgage is very similar to a buy to let mortgage, only it refers to a mortgage on a rental property that was previously the home of the landlord.