Bank of Mum and Dad unable to help on mortgages
Last month, the Telegraph reported that parents were paying their children’s mortgage deposits in order to help them onto the property ladder. But the survey conducted by parenting website Babies.co.uk in collaboration with home removals company TwoMenandaTruck.co.uk found that 26% of parents are unable to offer any financial assistance.
Thanks to government funding, first-time buyers need to save just a fraction of the value of their home for a deposit. In order to snap up the best deals, some are turning to their parents for help.
According to James Macfarlane, managing director of Babies.co.uk, “The vast majority of our users would love to help their children to buy their first home – it’s a huge milestone. However, even at the current mortgage deposit levels, many cannot afford to.”
Of those that could help, 10% responded that they would lend a sum of £1,000 to £5,000, 18% would lend £5,000 to £10,000 and 16% would lend up to £50,000.
A further 7% would lend up to £100,000, while an affluent 12% would lend more than £100,000.
In contrast, just 3% of parents ‘would not help’ at all.
According to Malcolm York of TwoMenandaTruck.co.uk: “Young people who would not otherwise have considered buying a home are taking advantage of low deposits and interest rates. Most of the first-time buyers we speak to say that, if you can scrape together a 10% deposit, renting long-term feels like a waste of money.
“We would encourage buyers to plan ahead to ensure that they will be able to afford the repayments when rates eventually rise.”