Buyers give themselves a break at mum and dad’s hotel
First-time buyers are battling to make a comeback and the “hotel” of mum and dad is helping them to save a deposit. Sharon Dale reports.
IT’S a question that parents regularly ask their teenage children: “What do you think this is? A hotel?”
The answer, according to the Office for National Statistics, is “yes” and it is likely to trade for far longer than the owners ever expected. The ONS has revealed that the number of young adults still living with their parents in Yorkshire has soared by over 40 per cent over the last decade.
House prices that are an average of 4.4 times their income, the cost of renting and youth unemployment are all reasons why 20-34 year-olds opt to live with their mum and dad, though a growing number are staying or moving back to save for a mortgage deposit.
Kelly Maw and her partner Jason moved to his parents’ house for a year so they could save up. They were each paying £400 plus bills to rent a shared townhouse in the trendy Leeds suburb of Chapel Allerton.
When they moved to Jason’s parents’ home in Baildon, they paid £100 each a month for food and bills and agreed that they would stay no longer than 12 months. They are now renting again while hunting for their first home.
Estate agent Kelly, 28, who works at Manning Stainton in Guiseley, says: “We had a lot of outgoings and there was nothing left to put in a deposit pot. Now, we’ve paid off credit card debts and we’ve been able to save.
“We suggested moving in with Jason’s parents and they were happy to help us. Luckily, they have four bedrooms and an ensuite, so there was room.”
They took turns to do the cooking and the couple punctuated their stay with regular weekends away to give them time to themselves.
“Jason’s mum and dad are absolutely brilliant and easy going but I think it was a bit more awkward for me because they aren’t my parents. I felt I had to watch my Ps and Qs but I’d definitely recommend it as a way of saving a deposit. We couldn’t have done it otherwise.”
While the ONS statistics look gloomy, Mark Manning, sales director of Manning Stainton, has good news on the first -time buyer front. He says first-time buyer registrations at the firm’s West Yorkshire branches have increased by 47 per cent over the past year.
“Improved lending has helped but I think the main reason is a general feel good factor about the property market. Those who were worried about prices falling now have the confidence to buy and there are others who are panic buying in case prices go up and they can’t afford anything,” says Mark, who adds: “I don’t think they should worry too much. House prices will rise over the next few years but I think it will be gradually.”
Instead of panic buying or fretting that you’ll never be able to afford a house, take time to study prices in your area, get some sound advice and plan a strategic approach. A deposit is crucial, but the percentage needed is decreasing. The Government’s recently launched Help to Buy mortgage guarantee scheme aims to help buyers get 95 per cent mortgages.
However, mortgage advisors, including Yorkshire Post columnist Franz Muehlthaler, are sceptical.
“The scheme has received less than 1,000 applications and has no immediate benefit to the would-be borrower,” says Franz, who works for Holroyd Miller estate agents. “There are now a number of lenders offering 95 per cent mortgages, so do not get caught up in specifically looking for Help to Buy, which may be more costly.”
He points out that Woolwich has a 95 per cent mortgage with rates starting at 3.69%, compared with a typical rate of five per cent on Help to Buy products.
“There are additional requirements on the Woolwich scheme, so ten per cent needs to be deposited in an interestbearing savings account with Woolwich and will be returned plus interest after three years. It should not be ignored, as the lower interest rate would save you £70 per month,” says Franz.
Mark Manning suggests that all first-time buyers talk to a mortgage advisor before house hunting to check loan eligibility and budget. The next step is to identify all the houses in your price range. Although property hotspots are often prohibitively expensive, there are other areas of Yorkshire where housing is much more affordable.
Look at the fringes of your preferred location or buy in an affordable area and build up some equity so you can move on.
A property portal search of Leeds earlier this week revealed that there are 71 homes on the market under £50,000. Some are shared ownership, which is another option for buyers.
An apartment in Queens Court, Mount Pleasant Road, Pudsey, is on the market for £69,950 with Manning Stainton with 75 per cent shared ownership. A two bedroom semi in New Earswick, York, on with Stephensons, is £82,500 for shared ownership.
“My view is that it’s a good time to buy or at least to start saving for a deposit,” says Mark Manning. “If moving back in with parents for a bit is an option, then why not do it? “Twitter: @propertywords