More fam­ily-funded home buys pre­dicted

Macclesfield Express - - SPORT -

IT’S a new year and in­evitably there comes a whole new set of property pre­dic­tions.

Ac­cord­ing to JMW Solic­i­tors, 2016 will see a record num­ber of fam­ily funded house moves as property buy­ers con­tinue to rely on fi­nan­cial help from their loved ones to get that first step onto the hous­ing lad­der.

The law firm predicts that ris­ing de­mand and higher property prices are making it in­creas­ingly dif­fi­cult for buy­ers to stand on their own two feet, de­spite gov­ern­ment moves to help first-time buy­ers, as out­lined in the re­cent Com­pre­hen­sive Spend­ing Re­view.

JMW has an­a­lysed na­tional data from the English Hous­ing Sur­vey from the past six years, which re­vealed that the per­cent­age of peo­ple fi­nanc­ing property moves with help from fam­ily and friends has risen ev­ery year since the peak of the UK fi­nan­cial cri­sis in 2008.

In 2008-09, when ques­tioned on the source of fi­nance for the pur­chase of their cur­rent property, 5.3 per cent of re­spon­dents an­swered ‘a gift or loan from fam­ily or a friend’.

This per­cent­age has con­tin­ued to climb in each con­sec­u­tive year, reach­ing seven per cent in the most re­cent re­port of 2013-14.

An­drew Garvie, con­veyanc­ing spe­cial­ist and part­ner at JMW, said: “We have ev­ery rea­son to be­lieve this fig­ure will con­tinue to rise as a re­sult of the in­creas­ingly high de­mand for property, at a time when prices are higher than ever be­fore.

“In 2015 I’ve dealt with a record num­ber of cases where buy­ers are us­ing money from par­ents and other fam­ily mem­bers to fund their de­posit, and I ex­pect this will be sur­passed in the next 12 months.

“While there are many ben­e­fits in this ap­proach to pur­chas­ing property, it’s im­por­tant for buy­ers and those pro­vid­ing the fi­nan­cial as­sis­tance to en­sure ad­e­quate le­gal mea­sures have been taken from the out­set.

“The most com­mon sce­nario, and the one ac­cepted in the main by mort­gage lenders, is that the funds are to be gifted by the fam­ily mem­ber rather than a debt be cre­ated. If the money is a loan how­ever, this should be spec­i­fied at the start, and sim­ple trusts can be im­ple­mented to safe­guard the funds so no con­fu­sion arises in the fu­ture – par­tic­u­larly if the buyer is co­hab­it­ing with an un­mar­ried part­ner who could be­come en­ti­tled to a share in the property if they con­trib­ute to the mort­gage re­pay­ments.”

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