54% of families will use cash savings to help relatives get onto the housing ladder
Just over half (54%) of families will use cash savings to help relatives get onto the housing ladder for the first time, Aldermore’s First Time Buyer Index has found.
And 24% will release equity in their property to help, 19% will move and downsize, 17% remortgage their property, while 6% said they will release cash sums from their pensions and 4% said they’ll sell their second property.
Damian Thompson, director of mortgages, Aldermore, said: “Young people have had a stark fall in home ownership the past two decades, and with a challenging environment of high house prices, shortage of suitable homes, and weak wage growth this trend will likely not change any time soon.
“A typical new buyer now needs 18 years to save for a deposit, a striking rise from three years in the mid-90s, meaning the need for the Bank of Mum and Dad to provide support has increasingly become a necessity, rather than just a helping hand.
“Dipping into cash savings has become common for parents to help their children, but almost half are looking at more substantial measures.
“For those looking to free up housing wealth, seeking financial advice on what options best suit individual circumstances is crucial. There has been an expansion in product offerings in recent years that provide alternatives to moving house and downsizing.”
For one in four (26%) first-time buyers, raising a deposit remains the biggest obstacle, as well as difficulties finding an affordable property (25%). Therefore, it is no surprise that more prospective first-time buyers than ever are turning to their family in order to support their dream.
Aside from looking for financial support from their family, more than one in five (23%) aspiring first-time buyers are currently living with their parents in order to help save for a deposit, and this amount has not changed in two years.
In 2017, prospective first-time buyers living at home were costing their parents an average of £4,996 a year for food and drink, petrol and utility bills.