Legal News

Escalating house prices in South Yorkshire are putting families under strain, according to a report in the Sheffield Telegraph.

Former Housing Minister John Healey MP has said he is concerned that recent research by housing charity Shelter shows that parents are having to “dig deep” into their own savings for retirement to try and help their children onto the property ladder.

Research shows that the “Bank of Mum and Dad” – the term coined to describe parental support for adult children – now funds deposits on new homes to the tune of £23,000.

Research from the TUC has shown that South Yorkshire town Rotherham is just one town which between 1997 (when New Labour won the General Election) and 2013 ceased being “easily affordable” and became ”out of reach” for most homebuyers.

John Healey is MP for Wentworth and Deane and he told the Sheffield Telegraph:

“The cost of renting and buying a home is causing huge financial strain in our area.

“The TUC figures bear witness to what many people are telling me – that while their wages don’t go as far, the cost of buying a home just keeps going up.

“House-building under this government is at the lowest level since the 1920s, pushing up prices and making it harder for people to buy.

“At the same time, the government is refusing to tackle rising rents in the private sector.”

The trend in parents financing deposits for properties bought by their children could be a time bomb for families, as parents use savings intended to pay for their care in old age to help their children.

Shelter research reveals that 20% of parents are financing deposits on properties bought by their children.

Interest rates are making mortgages cheap – but these may begin rising in the next few years. First-time buyers who have overstretched themselves financially to buy a property may find themselves in difficulty if they have not factored in the cost of mortgage repayments when interest rates rise, meaning the “Bank of Mum and Dad” may be called on again to help out.

Research by Shelter in November 2013 showed that in the southwest of England there is a growing trend for families to rent rather than buy their homes – and given rising rents in line with escalating property prices for homebuyers, this is a trend that is likely to have spread across the country as wages flatline, meaning many young families have never owned their own homes.

Chief executive of Shelter Campbell Robb said that the housing market was “getting out of control”.

“When parents are having to hand over such vast sums of money to help their children afford a stable home, it is yet another sign that the housing market is spinning out of control.

“A whole generation of young people are working hard and saving hard, but our desperate shortage of affordable homes still leaves them priced out – a pay-out from the Bank of Mum and Dad can’t be the next generation’s only chance of affording a home of their own.

“Politicians need to give back hope to all those left priced out, by building the affordable homes they are crying out for.”

Duncan Lewis Housing Solicitors

Duncan Lewis is a specialist firm of housing solicitors and can advise owner occupiers, rental tenants and social housing tenants on a wide range of housing law matters, including:

• Debt management
• Disrepair of rental property
• Housing Benefit
• Housing possession
• Landlord & Tenant disputes
• Local Authority housing
• Mortgage repossession
• Unlawful eviction.

Duncan Lewis also offers competitively priced conveyancing services to home buyers.

For expert legal advice on housing law, contact Duncan Lewis housing solicitors on 020 7923 4020.