/ Author: SPF

According to Legal & General and economics consultancy Cebr, young homebuyers in the UK are increasingly reliant on their parents, with family and friends expected to lend more than £6.5bn in 2017.

It’s a trend prevalent in Guernsey also, and we are seeing more parents helping their children get on the property ladder by way of gifting a deposit.

Unlike the UK, where there is assistance via the Government’s Help to Buy scheme, Guernsey does not currently have any initiatives to assist first-time buyers. However, the majority of local lenders are happy to support first-time buyers even if parents are funding the deposit.

At SPF,  we often speak to parents and first-time buyers about what can be done to best protect the gift in case of a separation, and most lenders are comfortable with parents taking a bond out to rank behind the lending bank. There is only one lender locally not willing to allow a second bond.

At the time of writing, industry awaits the KPMG Housing report and it’s hoped it will outline a suggested scheme for the States of Guernsey to assist first time buyers. After all, there are a number of people who don’t have the benefit of support from parents but could afford a mortgage, only cannot fund the deposit.