New research has highlighted that a growing number of property transactions taking place this year will use funds borrowed from the ‘Bank of Mum and Dad’.
Research from Legal & General found that relatives were expected to support 318,400 UK property purchases in 2023. Its survey found that a total of £8.1bn would be given by family members to help property purchases this year. The average amount being lent for a transaction was calculated at £25,600, with 47% of all purchases involving buyers under the age of 55 utilising funds from the Bank of Mum and Dad.
With any property purchase, it is important for prospective buyers to exercise caution and undertake due diligence before finalising the transaction – primarily in the form of a Chartered Surveyor’s survey. Arguably, this is even more crucial when property purchases are being facilitated with funds that have been borrowed or gifted from family.
A survey can uncover hidden defects, such as structural problems, dampness, or hazardous materials, that could significantly impact the property’s value and future maintenance costs. If the survey reveals significant issues that may require immediate attention or substantial repairs, buyers can use this information to renegotiate the price or request necessary repairs before finalising the purchase. This is especially critical when borrowing funds from family members, as it ensures that both parties are aware of the property’s true condition and can make informed decisions together.
The types of property surveys available include Level 2 Surveys (formerly known as RICS Homebuyer Reports) and Level 3 Surveys (formerly known as Building Survey Report). When produced by a Chartered Surveyor, either of these reports involve a detailed inspection of the property and a subsequent report that identify visible defects, potential problems, and any areas of concern. Whilst Level 2 Surveys are generally suitable for the majority of homes, Level 3 Surveys are recommended for properties that are older or of non-standard construction.
The expertise of a Chartered Surveyor provides vital information on the condition of the property and any potential issues, minimising the risk of financial loss and offering peace of mind to both the buyers and their lenders.
By investing in a survey, homebuyers protect themselves and their relationships while making informed decisions about their investment.
For further help or advice on obtaining a survey, please contact us. Our team would be happy to advise on the most suitable type of survey and/or provide a quote.
