Parents shouldering first-time buyer’s financial burden
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As rising house prices become more and more inflated for first time homebuyers trying to haul themselves onto that increasingly tricky first rung of the property ladder it seems that a large amount of the financial burden is resting squarely on the shoulders of the parents of those looking to flee the nest.
According to a report by Alliance & Leicester Mortgages parents are paying on average £21,314 to help their kids buy that awkward first property (the average cost of which £162,055). With the continuous increase in house-prices and the high probability of considerable student debt it would seem that for a growing amount of people the only way of getting on the ladder is by seeking the help of their parents.
One in five of the parents surveyed had already helped shoulder the financial weight of their kids first home and another one in five plan to help out when the time comes. The report also indicates that parents are prepared to donate more money than ever - the average figure has shot up £3,637 on last year's average amount of £17,677.Apparenty modern-day parenting is an expensive business.
So how come parents these days are seemingly so generous with their money? The report appears to indicate that guilt plays an important part - more than one in three say they'd feel guilty if they couldn't offer some financial assistance (incidentally dads experience this guilty burden more than mums - almost 50% of dads see it as their responsibility to help out the kids.)
There is a notable imbalance between the number of parents willing to help out their kids when it comes to buying a first home and the number of home buying children who are or have been prepared to ask for their parent's fiscal aid (18%). One in ten was prepared to request their grandparents for assistance if their parents weren't in a position to help.
Stephen Leonard, Director of Mortgages
at A&L commented: "It has become increasingly common for
parents to offer financial assistance to their children when they come
to buy their first home. Rising house prices mean first time buyers have
to find bigger deposits to secure their property, with many having to
fork out for stamp duty as well. This means extra funding from parents
can often make the difference between renting or being able to get on
to that first rung of the property ladder."
Go to the A&L website for more information on A&L
Mortgages.
