25th June 2014
The Bank of Mum and Dad is continuing to play an important role in their offspring’s first property purchase with current homeowners having received, on average, half of their deposit from their parents or their partner’s parents.
The study from Santander Mortgages reveals that more than two thirds (68 per cent) 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 per cent) of females were gifted the monies by their parents, in comparison to only 62 per cent of men. Almost three in 10 (29 per cent) received the money as the equivalent of an interest-free loan while only three per cent 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 per cent subsidy. More than one in five (22 per cent) estimates that their parents will contribute £20,000 or more.
A third (34 per cent) 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, says: “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.”