Second time buyers tapping the bank of mum and dad

HAMISH_MCTAVISH

Thrugelmir wrote: »

Or are they hanging on in the vain belief that prices will rise soon.

That prices will rise is inevitable.

So the only thing up for debate is your definition of "soon".

Itismehonest

Thrugelmir wrote: »

Or are they hanging on in the vain belief that prices will rise soon.

Some, may be, but most, no.

If you have paid for your home, got it to a level of comfort you are happy with etc. & aren't in financial problems why move to somewhere new which may devalue as soon as you move in?

The costs of living may come down fractionally when downsizing but not enough to make any significant difference. The bills still have to be paid.

There's altogether too much uncertainty for many to choose to make the leap unless they are forced to financially or for health reasons. So they wait.

Thrugelmir

Itismehonest wrote: »

Some, may be, but most, no.

If you have paid for your home, got it to a level of comfort you are happy with etc. & aren't in financial problems why move to somewhere new which may devalue as soon as you move in?

Once in retirement. Life changes financially for many. Why pay to run and maintain a property that's often too large.

Itismehonest

Thrugelmir wrote: »

Once in retirement. Life changes financially for many. Why pay to run and maintain a property that's often too large.

That's the dilemma but how much would you consider it worth dropping just to sell a place if you have no pressing need to?

If nothing outside the FTB market moves, do you suggest that everyone higher up the chain sells at FTB prices just to live in a smaller place, possibly in a less desirable area, & also end up with no equity left to live on or use toward their later years? Life doesn't work that way.

When the economic situation settles down, even if property values have fallen, more may be willing to sell.

Thrugelmir

Itismehonest wrote: »

That's the dilemma but how much would you consider it worth dropping just to sell a place if you have no pressing need to?

I would prefer to use the equity to travel the world for example while I was still able to. Health issues can afflict us at any time as we grow older.

Friends of mine are in this very situation. He retired at 60 on ill health grounds. So they cashed in. Downsized to a retirement "pad". Making the most of their time to travel whilst he is able.

Brallaqueen

Downsizing just puts additional pressure on the market for FTB doesn't it? From four bed family to a more manageable property (2 bed maybe?) then they'd be in direct competition with FTB and BTL.

Itismehonest

Thrugelmir wrote: »

I would prefer to use the equity to travel the world for example while I was still able to. Health issues can afflict us at any time as we grow older.

Friends of mine are in this very situation. He retired at 60 on ill health grounds. So they cashed in. Downsized to a retirement "pad". Making the most of their time to travel whilst he is able.

Precisely what most of us would like to do. I'd intended to be doing something similar myself. Except I wouldn't touch a retirement place. I'd just buy a smaller place.
However, if people can't move up the ladder to buy large properties then the equity isn't there to fund retirement - which was exactly my point.
I checked how many properties over £500K had sold in the last year within a fairly large area (first half of postcode) around here ......... 2.
This is in an area with property ranging from flats at £60K+ to large properties in the millions.

There's no shortage of large properties just a shortage of people who can work their way up the chain to afford them.
As I said before, if nothing is moving outside of the FTB & BTL bracket (down here that's mainly up to £250,000) then how do people in the top bracket move or how much do you think they should drop to do so?

If your friend had, say, an £800 - 900K (valued over £1m at peak) place would he have sold it for £300-400 just to get rid of it &, if so, could he still have afforded to fund his travelling?

ukcarper

Thrugelmir wrote: »

I would prefer to use the equity to travel the world for example while I was still able to. Health issues can afflict us at any time as we grow older.

Friends of mine are in this very situation. He retired at 60 on ill health grounds. So they cashed in. Downsized to a retirement "pad". Making the most of their time to travel whilst he is able.

As someone who was considering downsizing the market downturn has defiantly put me off as the amount I would have in my pocket has fallen to a level that makes me think its not worth it.

The thing with retirement type properties is they normally have high service charges and I don’t want to commit to higher monthly outgoings which I have no control over.

MrRee_2

Graham_Devon wrote: »

Suggests 16% of people would consider approaching their parents for help to trade up to their second property.

So, putting this into some kind of perspective ...... 16% would 'consider' - but not actually DO.

AND - 84% would NOT consider asking parents for help.

Your story is a non-story ...... do you ever just look in the mirror and say, "Today, I'm going to be sensible, I'm going to stop wishing ill of everyone, I'm going to celebrate the economy improving"? ..... no, thought not!!

Itismehonest

Brallaqueen wrote: »

Downsizing just puts additional pressure on the market for FTB doesn't it? From four bed family to a more manageable property (2 bed maybe?) then they'd be in direct competition with FTB and BTL.

Very true.
The freed up equity in some cases may go to help the next generation fund either a foot on the first rung or a move up the ladder to a larger place, though.