During a video discussion, Family Building Society said that families are increasingly coming together to support each other in homeownership – either to help buy a property or to support ongoing mortgage commitments if circumstances change.
But, according to two of the mutual’s business development managers (BDMs), it’s not always the parents helping their children. The society said it is seeing more children stepping in to support their mother and father or even grandparents.
Neil Cadwallader, BDM for the mutual, said: “It’s not always about rescuing [parents or grandparents] – it can be a positive situation: getting people into their new home or, when someone gets older, it means they don’t have to sell up and downsize.”
Watch the video below:
Multi-generational lending allows family members to buy a property together – something Cadwallader said is popular in the South West – or to take on a joint borrower sole proprietor (JBSP) arrangement.
BDM Arif Kara said he has seen instances of children using the JBSP arrangement to support retired parents to remortgage from interest-only to capital repayment due to an endowment shortfall.
However, the multi-generational lending market could be better served, said Cadwallader, with more lenders prepared to take a flexible approach to ages and incomes.
This is the third video in a three-part series. Watch part one here and part two here.
