Parents helping First Time Buyers – A new government proposal

The Liberal Democrats have revealed plans to give parents another way to help their children get onto the property ladder by using part of their retirement savings as a guarantee for their child’s home loan.

I understand the benefit to First Time Buyers of having support from their parents. However as with all things both sides of the coin need to be considered. Those heading for retirement at the moment are already having their dreams of a golden retirement put under extreme pressure by the recent performance of the Stock Market and the falling annuity rates (which have been negatively impacted by the Quantitative Easing Programmes).

So when this scheme is launched by the Government it will be interesting to see whether these retirees are able to afford to support their children onto the property ladder in such a manner. After all gifting some of your Pension Pot to their children will no doubt diminish the value of their monthly income. Income they will have to live off for the rest of their lives.

Since so many retirees are rightfully worried if they will have enough money to support themselves, this scheme may not be the solution for all. And those who can afford to offer up a percentage of their pension are probably more than likely to be able to support their children via alternative financial options.

One thing is for sure however, whichever option is selected to support First Time Buyers onto the ladder there are implications which need to be considered, as each could have a financial impact on the party who is doing the ‘supporting’. It really is a case of going in with your eyes open.

If you are considering helping your children to secure a home loan, or are a First Time Buyer looking at all the options, contact me for further advice.

Gill Alton

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Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors in the UK.

Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market.

The service is specifically aimed to support those who recognise the value of a UK investment portfolio, but lack the time, or knowledge to be able to invest for themselves because they are full time employees or Business Owners. With full consultation and comprehensive financial analysis, clients can be assured that their portfolio of strong yielding properties will be built to exacting standards and they will be kept up to date every step of the way.

Having been involved in property for 16 years Gill has built a personal portfolio for her family, and in addition to Alton Property Partners, runs a Property Mentoring Business, Venus Property Mentoring which focuses on supporting new investors onto the investing ladder. Having originally left the Corporate world to be a Qualified Mortgage Broker, Gill’s husband now focuses on their family Mortgage Brokerage in Maidenhead – Alton Mortgages.

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6 Bramble Drive, Maidenhead BerkshireUKSL6 3NX United Kindom •0845-095-5060

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