Bank of Mum and Dad lacks knowledge of FTB products

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53% of parents of potential first-time buyer children (18 to 35-year olds) are not willing to take financial advice to find out how best to support their children’s home purchase, the Halifax has reported.

It also found that 38% of parents surveyed said they were unaware of any of the major four mortgage products designed to help their children take their first step into homeownership.

32% of parents questioned said that they are both willing and able to financially support their children’s purchase. However, there could be a disparity between those parents who believe they are in a position to help their children and those who think they aren’t (61%). Many assume that helping with their offspring’s deposit is the only way they can assist their purchase.

There are now a number of products designed with first time buyers in mind, yet parents’ awareness levels of these products remains limited. Only around one in five parents (21%) have heard of guarantor mortgages, and just over a quarter understood that a mortgage could have multiple applicants such as friends and family to spread the monthly costs.

79% believe that it is more difficult for their children to buy their first home than it was for them. However, recent CML data on affordability reveals that monthly mortgage payments as a percentage of monthly income, currently 28%, are below the long term trend of 34% average over the past 25 years. Only 18% of parents view the current economic environment as an opportunity to take advantage of lower rates and prices, just 8% of those whose children have not stepped onto the property ladder are concerned about slow house price growth so wouldn’t invest in their child’s first home at the moment.

Stephen Noakes, Halifax’s commercial director for mortgages, said: “The bank of mum and dad is an important crutch for many first-time buyers

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