The first round of Property Hubs took place in Liverpool, Leeds and Nottingham across May 2018, bringing property professionals together to discuss hot topics – including the impact of ‘The Bank of Mum and Dad’.
Conveyancers are seeing gifted deposits “more often than not”
Conversations kicked off at 8am sharp, with attendees in all locations jumping straight into heated debates about how ‘The Bank of Mum and Dad’ is skewing the property market in favour of more privileged First-Time Buyers.
While not a new concept, it has become an increasingly common way for First-Time Buyers to get onto the property ladder, as one conveyancer working in Nottingham claimed: “We see gifted deposits more often than not when managing transactions for First-Time Buyers”.
From re-mortgaging the family home, to taking a lump sum out of their pension, parents are rising to the challenge of finding funds to support their children onto the property ladder. Even grandparents are getting involved. Property professionals across the country have also noticed financial providers “jumping on the bandwagon”, by developing new products to help make equity release options quick and simple.
Yet it quickly became apparent that the situation isn’t fool-proof, as attendees swapped cautionary tales about parents gifting deposits to young couples – only to lose their investment a few years down the line if the couple separates.
Parents are trying to help their children beat the rise in property prices
Yet for many it is worth the risk. Whilst avoiding inheritance tax is certainly a motivation for some parents, the continuing rise in house prices is also prompting many to help their children out sooner rather than later. This is especially true in areas such as Nottingham, where improved transport links are expected to drive house prices up by around 7% per year.
‘Buy to Let’ investors are also compounding the issue, by directly competing with First-Time Buyers for the more affordable flats and 2-bedroom “starter” homes in the area.
This problem isn’t going away any time soon
With property prices in many areas of the country expected to rise over the coming years, along with pressure on the private rental market, it seems unlikely that ‘Buy to Let’ investment opportunities will lose their appeal any time soon.
Even a sharp increase in affordable New Builds properties is unlikely to alleviate the pressure, as the next generation of First-Time Buyers come of age with ‘The Bank of Mum and Dad’ in tow.
And what about those without generous, well-off parents? The latest headlines predict it could take them up to 22 years to save enough for a deposit…
Want to join the conversation?
Our Property Hubs are returning to Leeds and Liverpool this July. They will also be making their debut in Northampton, Cardiff, Southampton and Bristol.
• Liverpool – Tuesday 10th July
7:30am until 9:30am @ Radisson Blu Hotel
Click here for more information
• Cardiff – Tuesday 10th July
3:00pm until 5:00pm @ Radisson Blu Hotel
Click here for more information
• Leeds – Wednesday 11th July
7:30am until 9:30am @ Radisson Blu Hotel
Click here for more information
• Bristol – Wednesday 11th July
3:00pm until 5:00pm @ Radisson Blu Hotel
Click here for more information
• Northampton – Thursday 12th July
7:30am until 9:30am @ Marriott
Click here for more information
• Southampton – Thursday 12th July
3:00pm until 5:00pm @ Grand Harbour Hotel
