Bank of Mum and Dad helping more kids onto the property ladder
This is a legacy post from the findaproperty.com blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.
In the old days, children grew up, left home and fended for themselves in the big bad world. Not so anymore. New research by my colleagues here at FindaProperty has found mum and dad are increasingly getting involved in their adult children’s lives, sometimes to the tune of thousands of pounds, which amounts to, let’s face it, a pretty forceful helping shove up the property ladder.
FindaProperty.com sat down with a group of people who’ve bought a home with their parents’ help in the past five years and over half of them said they had no intention of repaying a single penny to their dear old mums and dads. And we’re not talking small potatoes here either. Sixty-one per cent of first-time buyers say their parents gave them up to £20,000 to help them buy their home, while 32% got more than £20,000. Incredibly, 11% of first-time buyers got more than £50,000 from their parents to put towards their first bricks and mortar.
The research also found that first-time buyers need more support from the so-called Bank of Mum and Dad than they originally expected. Before they bought their property, nearly half of first-time buyers, or 46 per cent, thought they would need less than £5,000 from their parents to help with the purchase. But after the purchase only 22% received up to this amount, with most buyers getting much more.
However it seems that parents understand the need to give their children financial support and don’t expect much in return. When asked what the attitude of their parents was when they gave them money, 42% of first-time buyers said that their parents understood it was the only way they could afford to buy a property. Another 30% said their mum and dad saw it as part of being a parent, while 20% saw it as an investment in their child and 8% as an investment in the property.
In truly smashing news for children, over half of all parents who stumped up cash to help their kids get on the property ladder expect to get absolutely nothing back on their investment. Well, nothing financial anyway. I’d hazard a guess they’d be expecting a pretty permanent standing invitation to visit on Mothers’ Day, Fathers’ Day, birthdays, Christmas, Easter … the list goes on.