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Need a rest? Aim for the best.

One of the joys of getting older is that one becomes less excitable about things – instead calm contemplation and determined action are the bedfellows of the ‘experienced’ generation.

As such the much-vaunted recent White Paper issued by the Government on what it has admitted is a ‘broken’ housing market was, erm, unexciting.

There was little to report either for first time home buyers or for the increasingly important rental sector, from which there are limited avenues of escape for those trapped in the ‘deposit gap’ of affordability.

Governmental acknowledgement that the twin issues of lack of supply and shortage of affordability is, on the one hand, good news. Lack of serious policy, on the other, is not.
 
Yet what was interesting in the debate which followed this insipid document was the large number of members of the older generation pointing out that they would love to help loosen up the market with a supply of family houses at the top end.

These are the so-called ‘empty-nesters’ who are keen to downsize.

But doing so is tough, they reasonably pointed out. Because one, potential buyers of their property will incur a substantial Stamp Duty liability; two, the absence of a lively property market further down the ladder; and three, it would mean using a proportion of their sale proceeds to pay Stamp Duty at a time when they may need this for additional care, for example.

Think about it. Homes now worth more than £925,000 – which, let’s face it, is not uncommon in the South East of England – attract a big Stamp Duty bill. That’s an additional £36,250 – and on a second home a whopping 3 per cent on top – £64,000.

This blog, and indeed the Family Building Society itself, have expressed deep concern over the issue of Stamp Duty disparity.

While we decry this situation, and can’t reform Stamp Duty on our own, we can help those empty-nesters who wish to sell up solely in order to free up some gifted cash to their offspring in order to plug their deposit gap. In short, they don’t have to sell and gift HMG a nice Stamp Duty cheque. The Family Mortgage uses the equity from the parental home to act as security on their loan. Not a gift of cash nor a joint purchase (so no second home and an additional 3% stamp duty on top); just one way that innovative lenders like the Family Building Society are to help give your younger folk a leg up the ladder.

For more information on the Family Mortgage, talk to one of our friendly and highly-trained advisers on 03330 140140.

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