The rise in Bridging Finance to help get your Offspring on the First Rung of the UK Property Ladder

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In years gone by it used to be a lot easier for young parents to get finance to obtain a mortgage for their very first venture buying a family home. So long as they had a good credit rating and a good relationship with the bank manager, they stood a good chance with a decent deposit on their side. Their family would normally help with additional things like buying furniture, solicitor fees, paying or helping to pay stamp duty or towards a small deposit and alike if needed.

These days, however, first-time buyers and young families are under much higher pressure to obtain all of these traditional requirements in order to purchase the first family home. Currently, with the economic downturn and together with today’s housing market increase. it has been much harder so there is now a tendency for getting help from the “bank of mum and dad” so to speak.

In general, today’s young people trying to get on the property ladder need (for the most part) funding in the region of some £20,000 to £30,000 to purchase their first‘ basic’ property. This is a substantial amount for most people today and many are not able to afford this from the off so they are needing the help of family members where this is possible. Parents, in general, are the ones to give them a “leg up” if they can to help their children purchase their first property.

Some first-time buyers are increasingly looking to family support in the form of bridging loans (here is a great calculator) to both purchase and in most cases help renovate houses in order to climb up this expensive slippery pole. A lot of these first-time homes are in need of renovation which makes it even harder as the banks deem the property “unsuitable security” so if the family can help with this there is more of a chance of getting over the hurdles. If this can be organised, some of the money can be put into play with a bridging loan secured against their own property to increase the value of the purchase it suitable security for mortgage purposes. Once completed the property is remortgaged using the funds raised repaid to the family member who lent them the money, who in turn repays their bridging loan.



In these situations, family members are helping to make this possible for their children to get onto the property ladder and set up a stable home for their grandchildren in the future in the bargain. In some cases, there is potential for “mom and dad” to have some return on their investment to boot but there is, of course an element of risk, and before entering into something like this all parties need to research all aspects and be prepared to do some work and perhaps even roll up their sleeves to chip in on the renovation itself. All in all this option is coming into play more and more these days and is generally a good solution to the issues in this field today.