PARENTS WARNED AS MORTGAGE DROUGHT FORCES CHILDREN TO ASK FOR THOUSANDS TO GET ON PROPERTY LADDER

Benevolent parents are warned to seek advice from a solicitor before stumping up tens of thousands of pounds to get their offspring on the property ladder.

With first-time buyers finding it increasingly difficult to enter the property market, as banks are lending less and demanding 20 to 40 per cent deposits, parents are increasingly stepping in to help with finance.

Parents should use a solicitor to draw up a loan agreement with their child before lending this kind of money. Whilst their family are unlikely to run away with the money, life can get more complicated when children look to set up home with their partners or decide to get married. If things go wrong and the couple decide to separate the parents could lose out.

There are several issues to consider in these circumstances. The position of the loan should be covered in the parents' Wills, particularly if there are several children in the family. There are important tax issues to bear in mind and in most cases it will be necessary to tell any bank or building society lending on the property about the loan.

Before handing over your life savings it is crucial to obtain expert legal advice in order to avoid potential problems and to protect your best interests at every step.

Solicitors are trained experts and are highly experienced in navigating the maze of paper work and dealings with house purchases. Not only can we offer the best advice and service, we will help to avoid some unforeseen hazards that may occur down the line.

 16 January 2009

Disclaimer

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.