Parents coughing up children's mortgage deposits
Published by Max Salsbury for 24dash.com in Housing and also in Finance
Parents coughing up children's mortgage depositsImage: Mortgage via Shutterstock
Aspiring homeowners are continuing to rely on their parents for support - with current homeowners having received on average half of their mortgage deposit from their parents or grandparents.
A study by Santander Mortgages has revealed that more than two thirds of parents who provided money to help their children get on the property ladder will get nothing back in return as it was intended as a gift.
Almost three quarters (72%) of females were gifted the monies by their parents, in comparison to only 62% of men.
Almost three in 10 (29%) received the money as the equivalent of an interest-free loan while only 3% contributed towards their children’s deposit as an investment.
For those that are yet to buy their first home, the average amount they look to receive from parents is £17,900.
With the average FTB deposit being just under £25,000 this represents a 71.6% subsidy. More than one in five (22%) estimates that their parents will contribute £20,000 or more.
A third (34%) of those who have children yet to buy a home say they will contribute money towards a deposit in order to help them on to the property ladder.
Miguel Sard, head of Santander Mortgages, said: “Raising a deposit can be a huge challenge and our research shows that many rely on financial help from their parents in order to get a foot onto the property ladder. Buying your first home can be a daunting but there are ways to make it easier and support is available to help first time buyers with upfront costs.”