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Graduates relying on mum and dad for first house
The bank of mum and dad has come to the aid of more than half a million graduates in the last five years, to help them buy a home.
Research by Scottish Widows Bank reveals that one third of graduate first-time buyers have had to rely on a gift from their parents to fund their initial deposit.
This is despite many of them living at home - often rent free ? when they first leave university and get a job.
More than a quarter of non home-owning graduates who left university within the last two years lives with their parents rent free, while almost one in ten graduates who left university five years ago still live with their parents rent free.
"It is clear that there is an ongoing struggle for graduates to take that first step onto the housing ladder and, with house prices at historically high levels, it's not getting any easier," said Scottish Widows Bank's Murdo McHardy.
"Even those graduates that have been working for several years are forced to borrow money from their friends and family."
The boom in house prices over the last ten years means that many graduates no longer see buying a house as a realistic prospect in the near future.
One in 14 graduates who do not own their own home has got married before any other major life event, while one in seven graduates thinks they will get married before buying their own home.
Mr McHardy added: "It is interesting how much people's attitudes have changed in the past few years. It was not long ago that people would buy a house as a priority in their early twenties. Having children and getting married seem to be a less daunting prospect for many graduates than buying a house when in reality it is much more accessible than they may think."
Other options open to graduates include getting 100 per cent mortgages and asking their parents to act as guarantors to their mortgage.
Among the initiatives that graduates say would help them to get on the housing ladder are not needing a deposit, lenders lending more than three times their salary, taking future earning potential into account, and student loan debt not affecting the lenders' decision.
Click here to find a cheap UK mortgage
Research by Scottish Widows Bank reveals that one third of graduate first-time buyers have had to rely on a gift from their parents to fund their initial deposit.
This is despite many of them living at home - often rent free ? when they first leave university and get a job.
More than a quarter of non home-owning graduates who left university within the last two years lives with their parents rent free, while almost one in ten graduates who left university five years ago still live with their parents rent free.
"It is clear that there is an ongoing struggle for graduates to take that first step onto the housing ladder and, with house prices at historically high levels, it's not getting any easier," said Scottish Widows Bank's Murdo McHardy.
"Even those graduates that have been working for several years are forced to borrow money from their friends and family."
The boom in house prices over the last ten years means that many graduates no longer see buying a house as a realistic prospect in the near future.
One in 14 graduates who do not own their own home has got married before any other major life event, while one in seven graduates thinks they will get married before buying their own home.
Mr McHardy added: "It is interesting how much people's attitudes have changed in the past few years. It was not long ago that people would buy a house as a priority in their early twenties. Having children and getting married seem to be a less daunting prospect for many graduates than buying a house when in reality it is much more accessible than they may think."
Other options open to graduates include getting 100 per cent mortgages and asking their parents to act as guarantors to their mortgage.
Among the initiatives that graduates say would help them to get on the housing ladder are not needing a deposit, lenders lending more than three times their salary, taking future earning potential into account, and student loan debt not affecting the lenders' decision.
Click here to find a cheap UK mortgage
posted by Bruce Wayne at 9:15 AM
Graduates relying on mum and dad for first house
6 Comments:
After a fair slog, I've finally made it out of university, clutching my 2.1 with pride. I've only been working for 6 months, but I'm on a reasonable salary, living at home with my parents (Minimal rent! No bills! hooray!) and I'm eager to get a foot on the property ladder a.s.a.p.
I'm fairly prudent with my money, and would like to garner your opinions on where I should go from here. I've thought about investigating the feasablity of a joint ownership with a friend and just sitting tight and stashing any savings into an ISA.. What I'd like to know of is any other realistic/feasible options open to someone keen to make the most of his cash.. I could potentially save close to £750 a month after rent/expenses.. but how could I best invest this?
My student loan stands at 8k, I have an interest-free overdraft with Barclays of £1k and £4k stashed in my ISA to date.. I'm already fairly clued up re: ISAs.. Anyone got any tips for me?
My tip is stay at home as long as possible, save and pay off your debts (although I know student loans are at low rates they are still a debt)!
As soons as you move out/buy a property thats when you find out how much it really costs!
IMHO I would suggest you save for a couple of years (pref 4 or 5) to get a decent deposit saved and funds to pay for costs involved in buying a house and maintaining it.
Before buying property, look at this url:
http://www.nationwide.co.uk/hpi/dow...r_inflation.xls
If that does not work, go to
http://www.nationwide.co.uk/hpi/historical.htm
Click on 'Uk series' and select 'UK House Prices adjusted for inflation'
When that spreadsheet opens, select the chart and ponder. If you buy now, you will be buying UK property at an average price of £157k compared to a long trend figure adjusted for inflation of £107k.
House prices are bound to fluctuate around the trend line. However, you would be buying at nearly 50% above the trend line.
There are all sorts of fancy theories about why it is perfectly OK for property to be so expensive. So, you have to take your choice. Either the world has changed utterly, so that sky-high prices are here to stay. Or prices will revert to the long term trend (or even go below it), in which case we are due the mother of all falls.
Hiya i think Scottish widows do 100% mortgage, im a student and this is what i have recently found out...
Try HSBC, they were very helpful. I am a postgraduate student so have a reasonable income but it is tax free This was a big no no for all other lenders we tried. I think the rates are 5.5% so not the cheapest but there are no early repayment charges etc so we will change to a discounted mortgage as soon as we have taxable income and overall it's still better than renting!
I have a 100% graduate mortgage from HSBC and agree they are helpful...and so do Natwest I think (for first time buyers). Think HSBC have got a fixed rate at 5.19% so not brilliant...but at least it's a step on the property ladder!
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