Over 25s relying on parents for mortgage help

20 November 2008 / by Rebecca Sargent
More over 25s are relying on their parents for financial help than ever, a new survey from Engage Mutual has revealed.

When it comes to large expenses such as mortgages, the survey of parents found that 46 per cent confessed to helping their grown up child with the cost of moving house or buying a new home.

The news comes amid constant unemployment fears across the UK as a recession begins to take hold, making it even harder for first time buyers to even consider owning their first home.

As the mortgage market stands, a mortgage deposit of 10 per cent or less is becoming harder to obtain. In fact, according to Moneyfacts.co.uk, there are now just 66 90 per cent LTV deals on the market, compared to 586 only three months ago.

Commenting, Nick Breton, spokesperson for Engage Mutual Assurance said: "Our research shows that the financial connections between generations are becoming more profound.

"British parents are providing more financial support to their adult children who are finding it increasingly difficult to stand on their own two feet."

According to the Money Mail, lenders are also making it harder for young potential buyers to get their foot on the ladder by hiking fixed mortgage rates, despite the fact that the base rate now stands at just three per cent.

HSBC, which has so far failed to join the likes of Abbey, Alliance & Leicester and Lloyds TSB in cutting their mortgage rates in line with the base rate, has pushed its rate for a two year fixed rate 90 LTV mortgage to 6.99 per cent from 6.44 per cent, with a fee of £999.

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