Scots rely less on the “Bank of Mum and Dad” to take their second steps on the property ladder than their counterparts in the rest of UK, and are also much less willing to borrow from grandparents or friends, a report into mortgage borrowing reveals today.
The latest Bank of Scotland “Second Steppers” report reveals Scottish homeowners looking to sell their first house and buy their second plan to finance the next move with savings (50 per cent of respondents) while 60 per cent said they would also use equity in their current property.
Only 19 per cent of “second steppers” north of the Border said they expected to be looking for financial help from others in stark contrast to the rest of the UK where a third (33 per cent) believe they will finance their move with support from friends and family.
Second Steppers north of the Border who do get help from parents receive on average £12,059 in financial support, which is less than half the £25,450 average borrowed from parents by second steppers in the rest of the UK.
Those having to rely on financial support from family and friends mostly look to their parents, with 14 per cent borrowing from parents. Just 3 per cent of Scots look to grandparents or friends for support.
There has been an increase in the number of Scottish second steppers who are saving to support their next move, with 64 per cent saying that they are making regular contributions to their nest eggs.
But the percentage who pay extra towards their mortgages and therefore increase the available equity in their homes is only 26 per cent north of the Border, much lower than the 37 per cent elsewhere.
Mortgage director at the Bank of Scotland Graham Blair said: “Second Steppers in Scotland are much less reliant on support from family and friends compared to the rest of the UK. It seems that Scots are self-sufficient when it comes to their finances, as most feel that they will fund their move with equity from their current property along with savings. To be fair to the rest of the UK, house prices have increased at a slower rate in Scotland than the rest of the UK, so that may well be a contributing factor.”
Some 31 per cent of “second steppers” in Scotland said that market conditions had improved since last year but finding the right home remains a key issue, with just over two fifths (41 per cent) saying that they had not yet found the right property, and 26 per cent citing a lack of affordable property available.
These, and other factors, resulted in 58 per cent of Scottish second steppers wanting to make the move last year not being able to do so, which the Bank says will continue to have an impact on first time buyers.