Graduates leaving university usually can't afford to buy a house but if parents are willing to help, there's a way around the problem.
A couple of months ago the people over the road had a party for the neighbours. I know most of them by sight, if not by name, but I was a bit surprised to find that quite a few of them still had their twenty-something children living at home with them.
Parents usually have mixed feelings about seeing the last child fly from the family nest but for some of my neighbours that day doesn't look like coming anytime soon - and their kids are over 25!
Admittedly the main reason is that they can't afford to buy a house around here and living at home is so much cheaper than renting. Apparently more than 50% of graduates return to the parental home on leaving university so it must be quite a common situation these days.
The main stumbling block for recent graduates is that their starting salary simply won't allow them to borrow enough money to buy a property but there is a way around the problem.
Known as graduate mortgages, buyers can by-pass the problem by borrowing more than the standard guidelines with the help of a guarantor. The parents act as guarantor for the portion of mortgage that is over and above the standard amount and not the whole mortgage. The guarantee lasts until the borrower is earning enough to cover the whole loan at which point the guarantor is released.
So if you're a parent who's been wondering how to push your adult child out of the nest, now you know how to do it.
More: Mortgage Centre
