Prospective Buyers Moving In With Parents
There is a growing number of homeowners that are moving back in with their parents so that they can save money to put towards a bigger deposit when they buy a property.
This comes despite record low interest rates and the increased number of home loans available for borrowers with smaller deposits. The latest report carried out by Generation Rent questioned 1,000 parents of 20 - 45 year olds who had welcomed their children back to the family home.
Parents are being asked to contribute toward their offspring deposits, moving costs or to act as guarantors on loans issued to their children who have purchased a home. In many cases they are also contributing towards monthly mortgage payments with younger buyers.
There is a divide between borrowers who's parents own their own home and those whose parents live in rented accommodation. Much better rates are available for borrowers who's parents own their own home. Banks and building societies are able to secure charges against the homes of guarantors that own there own property outright.
Parents that live in rented accommodation are treated differently and the only way they can help is by giving their children a lump sum. Many people believe that this is unfair and that parents who own their own homes are treated differently. This is also said to be contributing towards a more unequal society according to generation rent. If homeownership becomes the preserve of the wealthy it will create more problems within the housing market and social mobility. Rents are at record levels as demand increases