Mortgages: One in six second steppers might turn to their parents

10 June 2013 14:15 - Mark Maffia

    



Mortgages:

One in six second steppers might turn to their parents


Lloyds TSB has conducted a survey interviewing 500 young people ready to buy a second home.   The research revealed
that many people on their way up the housing ladder turn to the ”mum- and-dad – bank”.

The reason for this development is the difference between the value of their present home and the one they would like to move to.   16 percent of the people questioned, which is one in six, are planning to ask their parents to help bridge the gap.

However, over half of second steppers would prefer to use money they have saved, and 77 percent hope to be able to finance their second home using equity of their current property.


Families are lending more

People who buy their first home borrowed on average about £700 more than the year before from their family, reaching about £13,700.   For second steppers the average amount had risen by approximately £7,000, to reach £19,216


Gap too large for many

About 61 percent of people who were ready to move up the property ladder could not do so because challenges are too high, 55 percent don’t have enough savings to be able to put down the deposit, and 38 percent find it difficult to find affordable property.


Capital needed

Within the last 10 years the price difference between a first and what people seek as an ideal second home has risen from £18,000 to £43,800.


Effects on the housing market

Not all parents are able to step in – this has a bad effect on the housing market which already does not show enough movement.

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