Bank of Mum and Dad wants their money back

In Yorkshire, 92 per cent of families who help their first time buyer
relatives with loans also ask for interest payments

More than half of family members that give money to first time
buyers expect to get it back, with three quarters wanting to be
paid interest on top, according to figures from the HSBC.

Almost one in five first time buyers received family financing in the last year and 52 per cent of family members who offered financial assistance provided it with an expectation to be paid back. 

Around 31 per cent gave outright cash gifts as the primary source of family financing, and 17 per cent requested part-ownership in the property in order to collect their money when the house is eventually sold on. 

The survey showed 73 per cent want to be paid interest as well, the most common rate ranging between 2.1 per cent and 2.5 per cent, around the current rate of inflation. Women are slightly less likely to be asked to pay interest than men, (70 per cent against 77 per cent).

Around England, in the South East, 56 per cent of families want interest to be paid on any financial assistance with that figure rising in London to 77 per cent. In Yorkshire, 92 per cent of families request interest, as do 94 per cent of families in the North West.

More than 8 out of 10 families lending to a first time buyer purchasing a detached house expect to receive interest, compared with 72 per cent of those buying a semi-detached house, and 63 per cent of those purchasing a terraced property. 

"Family support has become an important part of the first-time buyer financing mix, however the research shows that many relatives would like to be repaid at a later date," said Peter Dockar, Head of Mortgages at HSBC. "To avoid unnecessary strain on relations further down the line it is best to agree the terms with family members at the outset."

Savills has also been crunching the Bank of Mum and Dad numbers and conclude that the extent of financial assistance provided to first time buyers has been between two and three times higher in the last five years compared to the five years before the credit crunch.

So while first time buyer numbers are down, the deposit they have to put down has risen as has the proportion of buyers receiving assistance from 31 per cent in spring 2005, to 65 per cent post crunch.

Working on the basis that in cases where parental assistance was provided it funded the whole deposit, Savills estimates that the amount of financial assistance from the Bank of Mum and Dad in the five years post credit crunch would have been 131 per cent higher than in the previous five years (£18.5 billion as opposed to 8 billion).

Discover more property articles at Homes and Property
News
i100
News
people Emma Watson addresses celebrity nude photo leak
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
peopleHis band Survivor was due to resume touring this month
PROMOTED VIDEO
News
i100
Sport
Tom Cleverley
footballLoan move comes 17 hours after close of transfer window
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
Life and Style
fashionAngelina Jolie's wedding dressed revealed
News
Boris Johnson may be manoeuvring to succeed David Cameron
i100
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

C#.NET Developer

£500 per day: Harrington Starr: C#.NET Developer C#, WPF, WCF, ASP.NET, Prism...

Creche Assistant or Nursery Nurse

£8 per hour: Randstad Education Leeds: The Job Creche Assistant to start asap ...

Nursery Nurse Level 3

£8 per hour: Randstad Education Leeds: The Job Nursery Nurse Leeds We are now ...

Web Developer/UI Developer (HTML5, CSS3,Jquery) London

£55000 - £65000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering