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The Doomerang Generation

The much over-quoted late writer Mark Twain is noted for saying there are lies, damned lies and statistics.

That is not to denigrate the market research industry, or those who commission them, but there are some statistics which are so shocking they tend to stretch the imagination.

Still, it makes good headlines and this week saw the birth of a new phrase – the Doomerang generation.

This means that more than 7m people – 14 per cent of the adult population of the UK – have moved back in with their parents after a divorce or separation. The survey of 505 Doomerangs’ for Churchill Insurance led to this startling figure with the revelation that 7.2m adults have returned to their parents for more than six months. Biggs family LSM

The main listed cause was financial pressure with 55 per cent saying this forced them back home – rising rents, soaring house prices and more stringent mortgage criteria were all listed as top reasons along with the cost of healthcare.

Yet, however startling this research there is abundant data out there that the pressures on young, single and divorced people to get access to a new home are vicious and increasing in intensity.   

More highly-covered research this month from insurer L&G and the Centre for Economic and Business Research showed the so-called Bank of Mum & Dad will in future be involved in one quarter of all property transactions for their children.

None of this comes as a surprise to us at the Family Building Society where we offer those who have gone through the sorrow of a marital breakdown a helping hand to get back on the property ladder.

The Low-Start Mortgage is uniquely available to those with changes in relationship status or otherwise expecting changes in affordability like maternity leave.

Essentially what happens is that repayments are in five steps over the early years which flatten the early period over the hard part of the mortgage to allow the borrower time for their own financial recovery.

It is for this reason there are strict lending criteria. The initial rate of interest is kept very low for six months, increases in month seven and again from month 13 and still offers greatly reduced monthly payments for the first two years as it’s on an interest only basis i.e. you don’t have to pay back any of the money borrowed, you only pay the interest .

From the start of year three the mortgage is paid on a repayment basis with payments increasing accordingly. Then, as you did not pay any capital back in the first two years, the repayments will be higher than they would normally be.
That’s the helping hand Family Building Society is proud to offer.

For more information click here http://familybuildingsociety.co.uk/Mortgages/LowStart/LSM_how-it-works.aspx

 Steve McDowell

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Family Building Society
Ebbisham House
30 Church Street
Epsom
Surrey KT17 4NL
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