Newly released data from a recent survey of 2,000 prospective first-time buyers has revealed that parents are having to withdraw financial support set aside to help their children secure a home because of high living costs.
According to the research conducted by Aldermore, 59% of all first time buyers have seen their family scale back or remove support altogether.
One in five (19%) prospective first-time buyers expect their loved ones to pay approximately half of their overall deposit (approx. £24,790). Seeing this support decrease can lead to possible delays for those relying on help to get on the ladder.
Parents still going the extra mile to help fund their children’s dream
Although the most common way families assist in raising a deposit is by gifting cash savings (57%). The Index revealed parents are also making great sacrifices to help out, with 16% selling a second property, 15% downsizing their main property, 17% taking lump sums from their pensions and 9% remortgaging their property. However, nearly one in 10 (8%) prospective first-time buyers are unaware of how their family members are funding the money to help them bridge the gap.
Parents are also taking extra steps to help their children save for their deposit. One in six (18%) prospective first-time buyers live with their parents rent-free in the run-up to buying their first home.
Jon Cooper, director of mortgages at Aldermore, said: “The Bank of Mum and Dad has become a fixture of homebuying in the UK. Dipping into cash savings has long been commonplace for parents helping their children but they are beginning to feel the pinch when it comes to this support.
"While gifting to children is admirable, it’s important that families don’t overextend themselves or compromise their own finances in providing support to their children. I’d advise any buyer to seek the expertise of a broker, who can help navigate the more delicate and complex aspects of getting on the property ladder.”
