The Bank of Mum and Dad!

The bank of Mum and Dad is well and truly open to help first time buyers.

Eight out of 10 young people are thought to be receiving help from their parents to raise the deposits needed to buy their first home, according to the Council of Mortgage Lenders.

A record 80% of first-time buyers under 30 are thought to be receiving parental backing as they continue to put down deposits worth 25% of their property’s value.

The group said that there were signs that banks and building societies had stopped tightening their lending criteria from May onwards.

The average first-time buyer put down a deposit of just under £32,000 during May as an example.

The Council of Mortgage Lenders (CML) said it was unlikely that young borrowers would be able to build up deposits of this size from their own resources.

Its estimate for the number of first-time buyers receiving help is well up on previous figures that suggested only half of all buyers under 30 received parental help during the second quarter of 2008.

Further encouraging news for the housing market was that the number of people buying their first home with a mortgage rose for the fourth month in a row during May to 14,000, the highest month since October and well up on the low of 8,900 in January.

Although the figure is still a far cry from the 30,000-plus people who bought their first home each month before the credit crunch struck Jonathan Waters, owner of Jonathan Waters Estate Agents with two offices in Ipswich, was up beat.

“The Council of Mortgage Lenders report mirrors what we are seeing at our offices with a definite increased number of first-time buyers both enquiring about property for sale and now deciding to go ahead and make the purchase.

“Last month’s reports from the Halifax and Nationwide showing the biggest increase for some considerable time in house prices has encouraged many would-be buyers who have been sitting on the fence watching the market from a distance to decide now is the time to act.”

Jonathan continued “We have seen some very noticeable examples in the last two weeks of just what an effect this is having on the housing market locally.  Only this week we have sold a property within 24 hours of it coming onto the market, we have sold two properties at the full asking price, one within just a few days of coming on the market and another property saw multiple buyers competing against each for the purchase of a three bedroom semi detached house in Ipswich.”

A delighted Jonathan continued “Having seen many booms and busts in the housing market in all the years that I have worked within it, these signs are mirroring previous periods when we saw a housing market pick up and as such are therefore very encouraging.  Even the reports in the press on the housing market, having been nothing but “doom and gloom” for almost two years now are becoming more and more positive and I see immediate reasons for this to be suddenly reversed.

“There is, in my opinion, a massive pool of potential buyers who have wanted to purchase over the past 18 months but have been put off by falling prices who may now well decide now is the time to buy.  Long may it continue.”

"Now we've given you your deposit

for your new home, Mum wanted to

know if she could stop doing your ironing now?"

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