Buyers turn to family for help with deposit, expert claims

By Jonathan Dawes, Thu 24 Apr 2008 - Published in Mortgages

First-time buyers across the country are increasingly turning to parents and other family members to help them pay for a deposit on a house, it has been claimed.

As all the major lenders have now withdrawn from the 100 per cent mortgage market, first-time buyers are having to ask for help in affording a deposit, a spokesperson for the Council of Mortgage Lenders (CML) has argued.

Bernard Clarke from the CML said that turning to family members is increasingly the first option for those entering the property market.

"We have seen parents who have enjoyed equity growth in their own property over a period, being able to draw on that to help relatives who are first-time buyers with a deposit," said Mr Clarke.

He added while this is good for people in such a position, not everybody is able to benefit from these moves.

Other options to pay for a deposit may be to take out unsecured loans, but this would only be suitable for people that could afford to pay back two separate debts, Mr Clarke warned.

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