Parents are giving their children an average of £21,314 to help them onto the property ladder, new research from Alliance & Leicester has found.
The findings come from Alliance & Leicester Mortgage’s movingimproving index and reflects the rise in average first time buyer property to £162,055, the increased costs of university, and the growing cost of living, which all make it difficult for first time buyers.
Increased financial expectations are putting pressure on parents to help fund their children’s future, which is apparent in the rising figures they contribute - more than £3,500 higher than last year’s average of £17,677.
Twenty per cent of parents have used their savings to help fund their children’s venture into the property market, and a further fifth intend to help them when the time comes to buy their first house. Others are buying houses themselves in order to rent them out to their children.
Stephen Leonard, Director of Mortgages at Alliance & Leicester, says: “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.
“Whatever the motivation, many parents feel a strong urge to support their children financially when buying their first home. However parents should also remember that as well as helping their son or daughter to fly the nest, investing in a property through a buy to let mortgage, or loaning the money could benefit their own future financial security as well.”
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