The number of first-time buyers relying on financial input from the ‘bank of mum and dad’ has reached a historic high with the trend looking set to continue, new research by the Social Mobility Commission has revealed.
Analysis of government and housing market data by researchers from the University of Cambridge and Anglia Ruskin University has found that the number of young people embarking on home ownership has fallen dramatically. For 25- to 29-year-olds, home ownership has fallen by more than half in the last 25 years from 63% in 1990 to 31% most recently. With many of those who do manage to buy eventually only doing so at an older age.
More and more young people are relying on the bank of ‘mum and dad’ to get a foot on the housing ladder. Over a third of first-time buyers in England (34%) now turn to family for financial help with buying their home, compared to 1 in 5 (20%) 7 years ago. In additional a further 1 in 10 rely on inherited wealth.
It is not only first-time buyers who benefit from financial support from their family – over 1 in 10 (12%) of existing owners are also benefitting from a gift or a loan when buying a new home. In the UK, around a third (30%) of households with dependent children currently hold assets that could be used towards a deposit for the purchase of a home. The report also finds that first time buyers who receive money or a loan from their parents can buy 2.6 years earlier than those who do not.
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