Island Life Magazine Ltd January/February 2006 | Page 56

PROPERTY FEATURE

Estate Agent Simon Wratten
working hard to find a
solution for keen first time
buyers...

Buying a
home for
the first
time can
be an
uphill
struggle

Buying a property nowadays is difficult enough even for an
established buyer – so when it comes to your children, they have
more than a mountain to climb. It's almost impossible these days
for first-timers to get on the property ladder, with the average price
on the Island of a one or two bedroom flat being in excess of
£117,000 .

initial deposit, but there are several options open to parents,
depending on their personal circumstances” he says.

Obtaining mortgages is also increasingly difficult, with the income
to loan ratio in most cases being only 3 times joint income.
However, some building societies will go as far as seven times
income, although this would be really stretching your monthly pay
packet. If we take the average income for a 25-30 year old being
approx £15,000 on the Island, simple maths will tell you this makes
it impossible for your children to get onto the property ladder.

First, parents or grandparents might be generous enough to simply
lend or give the deposit to the children, which they regard as an
early inheritance. If parents are looking for a more secure option,
then a charge can be placed on the property which will protect the
parents’ investment if they decide to lend. As soon as the loan is
paid back, the charge can be lifted. Another favourable option to look
at is the range of offers from major developers, such as Barratt
Homes, who are keen to help the first time buyer. They run such
schemes as "equity share", which works by using the equity held in
the parents’ home as a guarantee against the new property, and has
proved to be popular with both buyers and parents.

As Simon Wratten of Fox Property commented “The sad thing for
kids is that most who live away from home pay more in rent than
they would do on a mortgage, and it's simply the initial deposit that
holds them back”.
So, how can you help them? Simon has a few suggestions for
making the first step easier.
“The biggest stumbling block that most youngsters hit is finding the

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You or your children have access to deposit funds

The government has realised the difficulty facing first-time buyers
and is now looking at putting schemes into place to help balance the
situation. One such scheme would allow the mortgage lender to
retain a share of the property and then charge rent on that share.