Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
Children Increasingly Support Parents with Mortgage Affordability
A growing trend has emerged in the UK property market, with more children supporting their parents or grandparents in meeting mortgage affordability requirements. Family Building Society highlighted this shift during a recent video discussion, noting the increasing need for multi-generational borrowing.
According to the society, families are coming together to help each other either purchase a property or manage ongoing mortgage commitments when circumstances change. Two business development managers (BDMs) from Family Building Society stated that it is not always parents assisting their children; there is a noticeable rise in children stepping in to support their parents or even grandparents.
Neil Cadwallader, a BDM for the mutual, explained that this support is not always about rescuing older family members. It can also be a positive move, such as helping someone move into a new home or enabling older relatives to avoid selling and downsizing.
Multi-generational lending options, such as joint borrower sole proprietor (JBSP) arrangements, are becoming more popular. Cadwallader noted that buying property together is particularly common in the South West. BDM Arif Kara added that he has seen children use JBSP arrangements to help retired parents remortgage from interest-only to capital repayment, especially when there is an endowment shortfall.
Despite these developments, Cadwallader suggested that the multi-generational lending market could be better served, with more lenders encouraged to adopt flexible approaches to ages and incomes.
This discussion was featured in the third video of a three-part series by Family Building Society.
Source: Mortgage Solutions