New “pensions-for-property” scheme
Deputy Prime Minister Nick Clegg has unveiled a new plan to help first time buyers by allowing them to use their parents’ and grandparents’ pension funds to help raise deposits.
Exact details of how the scheme would work have not been revealed. It would potentially involve pension pots being able to act as a guarantee for first-time buyers borrowing larger sums of money than lenders would typically lend them.
Bank and building societies’ large deposit demands mean many of those managing to buy, especially in expensive areas such as London and the South East are dependent on family help to raise money.
Mr Clegg said: “We have thousands of young people who are desperate to get their feet on the first rung of the property ladder, but deposits have doubled and the number of young people asking help from family members has doubled.”
He explained that the Government is going to work out ways in which parents and grandparents who want to help their children and grandchildren buy a property of their own.
He explained; “It’s a pension-for-property scheme, and that’s yet another example of the way in which we’re getting people who don’t have a great deal of disposable income, but do have a pension pot, to use that for the good purposes of helping their children and grandchildren buy a home that they can call their own.”