The Wokingham Word, February 2020

Alternatives to gifting house deposits
to help loved ones
Collectively, parents have given £6.3bn of
financial assistance to help their children step
on to the property ladder. A substantial figure, it
ranks the Bank of Mum and Dad (BOMAD) 11th, if
considered as a national mortgage lender.
The average contribution now stands at £24,100, an
increase of more than £6,000 compared to 2018,
research by Legal & General has revealed. However,
it seems the Bank of Mum and Dad is running out
of money and overly generous parents risk harming
their standard of living during retirement. In fact,
15% of the 1,600 participants surveyed admitted
to already having to cut back after helping a loved
one purchase a property.
Fortunately, gifting cash isn’t the only way you can
help a loved one step on to the property ladder and
other routes to support homeownership should be
considered.
At Newbury Building Society, our flexible and
tailored approach to lending gives us the ability
to help parents or grandparents boost their lovedone’s
borrowing power without having to dent their
personal financial well-being.
Joint borrower sole proprietor mortgages, for
example, is one such consideration which enables
parents to help their child by assisting with their
mortgage. Their income is used to improve overall
affordability without being named on the title
deeds. By doing so, the parent does not have to pay
the additional three per cent stamp duty surcharge
on a second property as well as capital gains tax
when the property is sold.
Parents could also remortgage or downsize their
own property to release equity to help fund a
deposit, if appropriate to do so.
In addition, there are several affordable housing
schemes available to support homebuyers fulfil
their property ambitions with more than 420,000
completions taken place using one or more of the
Government’s Help to Buy schemes, such as Help to
Buy Equity Loan and Shared Ownership.
Needless to say, the Bank of Mum and Dad isn’t set
to close its doors anytime soon, but parents can
rest assured there is more than one way to unlock a
loved one’s borrowing potential.
If you would like to discuss your mortgage opinions,
please contact us or visit us in branch. We provide a
tailored and individual service, and we are available
for Saturday appointments face-to-face, by
telephone or via video call.
Visit our Wokingham branch, 19 Broad Street,
Wokingham, RG40 1AU. Call: 0118 978 5945
or email: wokingham@newbury.co.uk
Wokingham Branch
Managers, Deborah
Gadd and Charlotte Hall
YOUR MORTGAGE IS SECURED ON YOUR HOME.
THINK CAREFULLY BEFORE SECURING OTHER
DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE
REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS
ON YOUR MORTGAGE.
Newbury Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority (Financial Services Register number 206077). English Law applies and we will communicate with you in English. We are
participants of the Financial Ombudsman Service. We have a complaints procedure which we will provide on request. Most complaints that we
cannot resolve can be referred to the Financial Ombudsman Service. 7801
The Wokingham Word 9 FEBRUARY 2020
Newbury
Building Society