Recommend a conveyancer that also protects the “bank of mum and dad”
2013 saw the largest annual rise in First Time Buyers since 2001 with an estimated 22% growth in their number. Economic commentators point to low interest rates, improvements in consumer confidence and of course the government Help to Buy scheme as all contributing to this growth. However they also recognise that for many first time buyers buying a house, raising the necessary deposit continues to present a challenge.
‘ Many first time buyers struggle to get on the property ladder due to the level of deposit they need’, explained Eddie Goldsmith, Senior Partner at property solicitors Goldsmith Williams ‘and because of this a good number, who are in the fortunate position of being able to, turn to the “bank of mum and dad”. What these first time buyers and their parents, may not realise is that the investing parents should protect their interests in the property too.
As a firm that not only offers conveyancing, but also a wide range of other legal services, one of the areas of law that we routinely consider and take action on, alongside the property transaction, is the basis of ownership of the property. This is particularly important in the circumstances where the “bank of mum and dad” also has a stake in the property. Indeed as a recently published report by the Halifax bank revealed that the average young buyer required a deposit of £30,943 - these parental investments can be considerable.
In situations such as this we highlight the opportunity to own property as Tenants in Common. In this case each co-owner owns a specific share of the property and this can be split however they wish. So the child whose parents are also investing can take a portion of the shares which reflects the greater overall contribution they have made to the deposit.
First time buyers particularly look to their broker to “hand-hold” them as they navigate their first experience of buying a property. Brokers should ensure that they deliver on their clients widest expectations by recommending a firm that offers a service which not only includes conveyancing but also legal protection for the “bank of mum and dad”!’
Content correct at time of publication