Waiting Patiently Posted February 14, 2006 Share Posted February 14, 2006 Half first-time buyers need helpBecky Barrow, Daily Mail 14 February 2006 RECORD numbers of first-time buyers have been forced to ask their family for financial help to get on the property ladder, official figures revealed yesterday. Nearly half of young people turned to relatives so they could afford rocketing home prices. In some cases, the amount lent or given can run to tens of thousands of pounds. The number needing help has soared since 1995 when less than 10% of buyers in their 20s turned to the 'Bank of Mum and Dad'. The trend is putting pressure on parents and other relatives, usually grandparents, who typically remortgage or dip into their savings to raise the money. The huge rise in house prices over the past decade has forced them to act if they want their children to have any chance of buying a home. The alarming figures come from the Council of Mortgage Lenders, which looked at the plight of first-time buyers who were aged under 30. Its research showed that 46 per cent of this group were given money towards their first home by family. The figure highlighted the huge gulf that has opened up between young people with generous parents and those whose relatives cannot afford to help or refuse to do so. A typical 'assisted' first-time buyer under 30 earns £25,000 but is able to put down a deposit of £34,200 and buy a home for £136,500. But a young first-time buyer without family help must be on a much higher salary, typically £34,500, to get on to the property ladder. Despite earning more, they can typically only afford a deposit of £7,000 on a home worth £118,500, which is likely to be smaller or in a worse area. The huge financial pressures on young people has meant that the number who bought their first home collapsed last year to its lowest since 1980. Just 320,440 first-time buyers got onto the property ladder. That is less than half the number who managed it in 1999 when they needed under £60,000 to buy a home.............continued................ Daily Mail Quote Link to comment Share on other sites More sharing options...
MOD Posted February 14, 2006 Share Posted February 14, 2006 Daily Mail Hmm, so FTB help inflate the house prices buy borrowing money from relatives. If they hadn't bought the property would the prices have dropped (from what I did of ecomnomics YES) Quote Link to comment Share on other sites More sharing options...
lampkin Posted February 14, 2006 Share Posted February 14, 2006 Hmm, so FTB help inflate the house prices buy borrowing money from relatives. If they hadn't bought the property would the prices have dropped (from what I did of ecomnomics YES) I think the problem is a lot of people don't want to wait around. They look around and see all prices at this price and think its the norm. Everybody is telling them to borrow and everyone says theres no risk and in 5 years time they will have made a few grand... Quote Link to comment Share on other sites More sharing options...
MOD Posted February 14, 2006 Share Posted February 14, 2006 I think the problem is a lot of people don't want to wait around. They look around and see all prices at this price and think its the norm. Everybody is telling them to borrow and everyone says theres no risk and in 5 years time they will have made a few grand... I don't want to wait around either which is probably my problem! Quote Link to comment Share on other sites More sharing options...
Waiting Patiently Posted February 14, 2006 Author Share Posted February 14, 2006 There's plenty of grim economic reality in todays Mail. This is prominently displayed on page 2 above the earlier piece.................... Family debts outstrip UK outputDaily Mail 14 February 2006 BRITAIN'S personal debt mountain has grown larger than the annual output of the economy for the first time. Families owed £1,158bn on credit cards, loans, overdrafts and mortgages last year - up 10%on the year before. The nation's factories and offices generated £1,127bn - 1.8% up on the previous year. The debt burden has had a knock-on effect for the wider economy, causing a slowdown in consumer spending. It has, however, generated huge profits for the banks. The 'big five' - HSBC, RBS-Natwest, Barclays, LloydsTSB and HBOS - are due to announce record annual profits of £35bn in the next few weeks, 15% higher than the year before. Keith Tondeur, of financial education charity Credit Action, said the latest figures from the Bank of England were 'another in a list of alarming milestones'. He added: 'British families are carrying two-thirds of the creditcard debt of the whole of Europe. Bankruptcies and repossessions are soaring.' Some experts have argued that rising debt is not a problem because higher house prices have made families wealthier on paper. But Mr Tondeur said this cushion could be lost if the property market collapses or unemployment rises. 'We are seeing significant numbers with unsecured debts of £30,000,' he said. 'That generates interest of £300 to £400 a month. Who on earth can afford that?' He said the banks should have done much more to assess whether customers could repay credit they were offered. 'I would hate to think what would happen if we had a significant rise in unemployment,' he added......... Daily Mail...debt Quote Link to comment Share on other sites More sharing options...
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