A Bank of England (BoE) economist has revealed that those who have access to the Bank of Mum and Dad get a 10-year head start over their counterparts when purchasing a home.
Conversely, new data from Allbricks found that 45% of 18–34-year-olds say their family are unable to provide them with financial help in terms of securing a house deposit, and a further 43% of 18–34-year-olds say that their biggest anxiety now is that they will be stuck renting for the rest of their life.
Shahram Shaida, CEO and founder of home-buying and property investment platform, Allbricks, calls this “Generation Stuck”, whereby homebuyers are simply priced out of the market without any hope of getting onto the housing ladder.
Last year, the housing market witnessed a remarkable surge as average house prices soared to a record-breaking figure of over £292,500. However, in May, prices slightly declined, settling at £285,861, as reported by the ONS.
Despite this fluctuation, the significance of financial assistance from parents has steadily increased in recent times. Accounting for inflation, the average house price has seen a staggering rise from approximately £100,000 in the mid-1970s to £275,000 today.
Consequently, this surge has created challenges for individuals without wealthy parents, as it becomes increasingly difficult for them to raise sufficient deposits and manage monthly mortgage payments.
This leaves Generation Stuck in a state of limbo in the rental market, which has seen an escalation in competition, with new BBC data indicating that there are typically 20 requests to view each available property, more than triple the figure from 2019.
Shahram Shaida, CEO and founder of Allbricks, commented:
“Rents across the UK are increasing at the highest rate for decades. And while property prices are starting to fall, prospective house buyers are finding themselves in a tricky position. Rising interest rates and the cost of living might make house prices drop but they also make it much harder to get a mortgage or save for a deposit.
And as interest rates rise and concerns grow, mortgage companies are demanding higher deposits. There are fewer and fewer mortgage offerings on the market for those with under a 15% deposit because banks fear they’ll end up in negative equity. It leaves many people stuck where they are.”
