59% of potential first-time buyers anticipate support from parents or other family members to help them get on the property ladder, according to new research.
At present, the average property price for first-time buyers in England is £198,325, so a 10% deposit would set hopeful homeowners back nearly £20,000. According to the report from Yorkshire Building Society, 80% of those who need help expect the total value of any support to be less than this level. However, the survey also revealed that 14% of adults aged 25-40 are hoping for financial support of more than £40,000, that’s compared to just 5% of 18 to 24-year-olds.
Commenting on the state of the housing market, 82% of first-time buyers think it is harder for them to buy a first home compared to their parents’ generation. They do however feel angst at having to turn to their family for support, with 66% of those expecting financial help starting that they would feel guilty about receiving a handout, and 59% concerned that any support could negatively impact their parents’ future finances.
Remarking on the findings, National Intermediary Sales Manager at Accord, David Robinson, said: “In what is a tough environment for young aspiring homeowners, the ‘Bank of Mum and Dad’ continues to support young peoples’ dream of buying their first home.
“But while it’s clear that parents are willing, where they can, to help their children get on to the property ladder, the burden of how it could negatively impact their family’s finances is leading many young adults to feel guilty about accepting help.
“There are many parts of the country where average house prices dwarf earnings. Many first-time buyers turn to a broker for advice, so our survey results may help to remind them of the financial and moral dilemmas first-time buyers face when they help a client take their first steps on the property ladder.”
Despite the need for help, younger buyers are optimistic about getting onto the property ladder with 65% stating that it was likely or very likely that they would become homeowners, and 56% declaring they are currently saving towards their first property.
Mr Robinson added: “Despite the challenges facing potential first-time buyers, our results paint an optimistic picture and show how young adults in the UK still value owning their home, even going as far as to suggest it would be the most important milestone in their life.”
Earlier this year, research from Lloyds Bank highlighted that it’s not just first-time buyers who rely on the Bank of Mum and Dad. Indeed, according to the bank, one in three ‘second-steppers’ rely on handouts averaging £20,000 to move up the property ladder.
