Number of first-time buyers relying on parents’ help hits record high, news on new homes in Sevenoaks and Tunbridge Wells, plus Property of the Month
The number of first-time buyers relying on the “bank of mum and dad” for financial help has hit a record high, according to new research for the Social Mobility Commission, which suggests that more than a third of homebuyers in England depend on money from their family.
Using the latest official data available, from 2013-14, researchers found:
• 34% of buyers needed cash or a loan from their parents. That compared with just 20% in 2010-11.
• A further 10% of buyers relied on inherited wealth.
“Affordability problems mean that parents and other family members have a critical role in assisting their children to buy their first home, either by means of a gift of money or a soft loan,” said the report author, Dr Paul Sanderson from Anglia Ruskin University.
The issue has already been highlighted by insurance company Legal & General, which said that a quarter of all mortgages in the UK last year were part-funded by parents. It said that the average amount given was £17,500.
A survey by Savills in December last year found that just 20% of 25-year-olds now own a house or flat. The average cost of a home bought by a first-time buyer in England and Wales is now just under £200,000, according to the Land Registry.
The Social Mobility Commission was set up in 2010 and advises the Government on social mobility issues in England.