Property expert David Leake of Housesetc, discusses the Right-To-Buy scheme and the impact on social housing stock…
When Margaret Thatcher launched the Right-To-Buy scheme in 1980, it was meant to result in a ‘property-owning democracy’, but it didn’t quite turn out like that.
Local authorities have reported that around 40 per cent of the social housing stock sold is now owned by private landlords and rented out, leaving the government to subsidise the ever-increasing private rents.
With more and more prospective first-time buyers now being forced to turn to the rental market, rents are unlikely to reduce anytime soon with demand on the rise.
Recent research predicts that the size of deposits required for property purchase could rise considerably across the country and first-time buyers could be forgiven for giving up hope on owning their first home. Research reports that parents lent around £6.5bn to their children in 2017, making the Bank of Mum and Dad the equivalent of the UK’s ninth largest mortgage lender!
Ways parents can help their children: Parents considering gifting money for a house deposit to their kids have various options. About two-thirds of all first-time buyers in the UK pay a deposit of up to 20 per cent of the purchase price.
Equity Release – The two main equity release options include:
• Lifetime mortgage – a popular option, parents don’t have to make any repayments while they’re alive. Interest is simply added to the loan, which is repaid when the home is eventually sold.
• Home reversion – a less popular option that enables parents to sell part or all of their home to a reversion provider and receive 20 – 60 per cent of its value.
Gifting money for a house deposit
21 per cent of parents provide an interest-free loan and 2 per cent (Yorkshire men) offer it as a loan with interest, whilst 56 per cent of parents choose to gift money.
Housesetc can be contacting on 01405 780666 or firstname.lastname@example.org for advice and information on all aspects of buying or selling property.