There is a wide difference between prospective first time buyers and their parents with regards to their perception of the first time buyer market in the new UK.
New research shows that while just 12% of parents believe it is ‘virtually impossible for first time buyers to obtain a mortgage’ this rises to 21% of actual prospective first time buyers.
The Generation Rent Report from the Halifax Building Society shows that in recent years parents and renters were both more pessimistic about the first time buyer market. However, with improving economic conditions and an increasing number of first time buyers since then, both parents and prospective first time buyers have become more optimistic although more than a fifth of renters still believe it’s virtually impossible.
Despite increased optimism from parents the report also found that first time buyers moving back in with Mum and Dad is a growing issue, and in 2015 some 28% of parents said their children moved back to their family home, compared to 24% in 2012.
Looking at how parents have supported their children in buying their first home, it becomes apparent that direct parental contributions towards the costs of a mortgage have remained steady.
While a contribution towards a deposit has remained the single largest type of contribution the numbers have remained steady. The only increase in the last four years has been those helping with the actual costs of moving house.
Some 57% of parents who own a listing reported to having contributed, or planning to contribute, towards their child’s deposit, compared with 24% of parents who rent. And 24% of parents who own said that they were, or plan to be a guarantor on a mortgage compared with just 7% of parents who rent.
As parental help is evidently more important for the people who want to get on the listing ladder, it is interesting to note that parents who own their own home are more likely to help their children than those who rent. This clearly emphasises the importance of listing ownership for the prosperity of future generations.
‘The report shows a clear divide between parents and their children as regards optimism over getting on the housing ladder. In reality there are more mortgages available which require a 5% deposit and first time buyer numbers are increasing,’ said Craig McKinlay, Halifax mortgage director.
‘But whether it is giving their children a cash lump sum or providing a roof over their heads while they save, it is clear the bank of mum and dad will have a role to play in helping their children get on the listing ladder for the foreseeable future,’ he added.
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Source: Property News Spain