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Parents Pump £1.3bn into UK housing market

30/12/2023

Recent research by The Equity Release Council has revealed that more than 228,000 first-time buyers have relied on assistance from generous family members, amounting to a £1.3bn injection to the housing market. According to the feedback, around one-third of all first-time buyers have benefitted from a helping hand, with the average amount totalling 20% of the deposit. This indicates that over the last five years parents have been boosting the market to the tune of £23.05 million every month.

This philanthropy also extends to grandparents. With it becoming increasingly difficult to get that all-important foothold on the housing ladder, the older generation are also willing to help their grandchildren. About 6% of first-time buyers were in receipt of an average of 18% of their deposit

from grandparents, equating to over £125m over the same five year period.

Although almost one quarter of parents stated they were proud to be in a position to invest in their offspring’s future, concerns have been raised about families having to stretch finances in this way. Indeed, 36% of those surveyed suggested some children might never be able to cope on their own in the financial world. Another common worry was the divisive nature of these hand-outs, as one child receiving more than another could lead to friction. A further 15% highlighted the issue that older relatives ran the risk of running into financial difficulties themselves in later life.

Andrea Rozario, director general of the Equity Release Council, commented: “It is concerning that some people are delaying giving up work, using retirement savings or even re-mortgaging their homes to help their children financially”. He concluded that while over-55s were more likely to have housing equity to pass on, financial advice should always be sought before investing large sums.

Buying Houses since 1972