The number of young adults in the UK expecting help from the Bank of Mum and Dad to buy their first home is double the number who received such support with their deposit in 2016, new research has found.
Many, some 66% of 18 to 40 year feel guilty about getting help from their parents or other family member towards a deposit for a property, the latest first time buyers report from the Yorkshire Building Society also shows.
Overall, relying on the Bank of Mum and Dad is becoming the norm, with 59% would be home owners expecting to receive handouts from parents or other family members in order to buy a property.
Some 82% of young adults expecting to receive help to get onto the property ladder believe it’s unfair that their generation is finding it harder to buy their first home compared to their parents’ generation.
The majority, 59%, of those expecting support are concerned that by accepting help it would negatively impact their parents’ future finances, according to the study which involved a nationally representative UK sample of 18 to 40 year olds to examine the attitudes and concerns first time buyers have towards buying their own home.
While the average property price for first time buyers in England is £198,325, meaning a 10% deposit of nearly £20,000 is needed, 80% expecting help from parents and family expected the total value of this support to be less than this level.
The survey also revealed how 14% of adults aged 25 to 40 expecting help from family anticipated the value of the support they received to be more than £40,000, compared to just 5% of 18 to 24 year olds.
‘In what is a tough environment for young aspiring home owners, the Bank of Mum and Dad continues to support young peoples’ dream of buying their first home,’ said David Robinson, national intermediary sales manager at Accord which carried out the research for the bank.
‘But while it’s clear that parents are willing, where they can, to help their children get on to the property ladder, the burden of how it could negatively impact their family’s finances is leading many young adults to feel guilty about accepting help,’ he pointed out.
‘There are many parts of the country where average house prices dwarf earnings. Many first time buyers turn to a broker for advice, so our survey results may help to remind them of the financial and moral dilemmas first time buyers face when they help a client take their first steps on the property ladder,’ he added.
Despite angst over family support, findings from the Yorkshire’s report demonstrate how young adults remain optimistic about the prospect of owning a property, with 65% believing it was likely or very likely that they would become home owners, and 56% admitting they are currently saving money to buy their first property.
Aspiring home owners also clearly still place importance on achieving their home ownership ambitions, with 56% saying they would feel they had succeeded in life if they could buy a property compared to 63% in 2016. Indeed, 20% reported owning a house is more important to them than any other life event, including getting married or having children.
The majority of those surveyed also believe owning a home would be good for their future prospects, with 83% saying they thought it would be a good financial investment.
‘Despite the challenges facing potential first time buyers, our results paint an optimistic picture and show how young adults in the UK still value owning their home, even going as far as to suggest it would be the most important milestone in their life,’ Robinson concluded.