Two-thirds of first-time buyers turn to mum and dad
Parents are putting their own financial futures at risk in order to help their children get on the property ladder, a new report has found.
As house prices continue to rise, research from Halifax has found that two-thirds (63%) of buyers aged 20 to 45 received help from the bank of mum and dad to do so, while 60% agree that there is now an expectation that parents will help them with their deposits.
Parents are risking their own financial futures to support their kids, with more than a third (38%) concerned about their own financial situation after giving money to them to help them buy.
In order to find the cash, more than a quarter (27%) dipped into their savings to do so, while 10% gave their child an early inheritance.
The research found that 57% of parents with children aged 20 to 45 has already done, or would expect to do something, to help their children get on the ladder, with a sizeable 44% helping out, or expecting to help, with their deposit.
Nearly one in five (18%) are or expect to be a guarantor on their child’s mortgage, while 14% are, or expect to, help contribute towards their child’s monthly mortgage payments as well.
And in a sign of the stark-reality first-time buyers face, a massive 92% of mums and dads think it is hard or impossible for their children to obtain a mortgage without their support.
Last week, figures from the Land Registry revealed the average house price rose by 5.6% in the year to March to £169,124 - just £12,000 less than the pre-crisis peak of November 2007.
A fundermental first step
Craig McKinlay, mortgages director at Halifax, said: "For many buyers, parental support is now the fundamental first step onto the property ladder.
"For parents whose children are looking to buy, and the those first-time buyers now wanting to own, real consideration needs to be given to set realistic timescales and ways in which this can be achieved without either party being overstretched of facing longer term financial difficulty as a result."
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