Family-funded house moves look like the most popular trend for 2016 as those who wish to acquire properties continue to seek help from loved ones in order to move up the housing ladder, predicts JMW Solictors in a report by Manchester Evening News.
It's getting a lot more difficult for buyers to enter the market on their own feet with rising demand and shooting prices - all bad indications of what's in store for the next 12 months, despite government's efforts to provide assistance to first-time home buyers, as outlined in the recent Comprehensive Spending Review.
Based on the data from the English Housing Survey in the past six years as analysed by JMW, there's been a yearly increase in the number of family-financed property moves since the 2008 UK financial crisis.
A survey in 2008-09 revealed that 5.3 percent of respondents answered "a gift or loan from family or friend" when asked on the source of their financing for their current property. This number has continued to increase up to 7 per cent in the most recent 2013-14 report.
According to conveyancing specialist Andrew Garvie of JMW, "We have every reason to believe this figure will continue to rise as a result of the increasingly high demand for property, at a time when prices are higher than ever before.
"In 2015 I've dealt with a record number of cases where buyers are using money from parents and other family members to fund their deposit, and I expect this will be surpassed in the next 12 months.
"While there are many benefits to this approach to purchasing property, it's important for buyers and those providing the financial assistance to ensure adequate legal measures have been taken from the outset.
"The most common scenario, and the one accepted in the main by mortgage lenders, is that the funds are to be gifted by the family member rather than a debt be created.
"If the money is a loan however, this should be specified at the start, and simple trusts can be implemented to safeguard the funds so no confusion arises in the future - particularly if the buyer is cohabiting with an unmarried partner who could become entitled to a share in the property if they contribute to the mortgage repayments."
There has been a strong wave of overseas buyers for UK properties in the past 12 months and JMW is not expecting this trend to change come 2016.
Areas in London and Manchester have attracted cash buyers from the Far East and Asia, considering a British property as a safe-haven for investment.
However, a cautionary note is out there with the recently increased stamp duty and tax rates on second homes that could potentially dampen the demand when they come into force on 1st April 2016.
